Anika Therapeutics Inc. (ANIK - Free Report) is scheduled to report third-quarter 2018 results on Oct 24, after market close.
In the last reported quarter, the company delivered a positive earnings surprise of 134.48%. The company has a mixed track record. It missed estimates twice in the four trailing quarters while beating the same on two occasions, delivering an average positive earnings surprise of 20.84%.
Notably, Anika’s share price has decreased 23.9% so far this year compared with the industry’s decline of 14.7%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Anika earns revenues from the sale of several drugs, which can be categorized under three major segments – Orthobiologics, Surgical and Dermal. The company recorded growth of 8% in product revenues in the second quarter of 2018.
Sales of the Orthobiologics segment, which generates more than four-fifth of the total product revenues, are mainly driven by two drugs – Monovisc and Cingal. However,sales of Orthovisc have been declining for the past couple of quarters. Also, viscosupplementation product is facing pricing pressure in the United States. Overall, the company expects segment sales to increase on the back of strong growth of Monovisc and Cingal, which will offset the decline in revenues from Orthovisc and viscosupplementation product.
The Surgical segment did not perform well in the past couple of quarters. Sales of surgical products declined. Dermal segment sales however demonstrated strong growth in the second quarter. However, voluntary recalls of certain products in the first half had significant unfavorable impact on sales of dermal products in the first half. The company expects Dermal segment sales to decrease due to recalls.
Anika is developing Hyalofast and Cingal in late-stage studies, which is increasing the company’s research & development (R&D) expenses. These studies and other development activities are expected to drive R&D expense higher this quarter.
Our proven model does not conclusively show that Anika is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.
Earnings ESP: Its Earnings ESP is 0.00%. This is because the Most Accurate Estimate as well as the Zacks Consensus Estimate is pegged at 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Anika’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Amgen Inc. (AMGN - Free Report) is scheduled to release results on Oct 30. The company has an Earnings ESP of +0.56% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) is scheduled to release results on Oct 24. The company has an Earnings ESP of +3.01% and a Zacks Rank #3.
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release results on Nov 6. The company has an Earnings ESP of +2.68% and a Zacks Rank #3.
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