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What's in Store for Bristol-Myers (BMY) in Q4 Earnings?

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Bristol-Myers Squibb Company (BMY - Free Report) is expected to report fourth-quarter 2018 results on Jan 24, before market opens.

Bristol-Myers’ shares have decreased 8.9% in the past six months, against the industry’s growth of 7.1%.

 

Bristol-Myers has an excellent track record. The company delivered positive earnings surprise in all the four quarters. Average positive earnings surprise in the last four quarters is 12%. In the last reported quarter, Bristol-Myers delivered a positive surprise of 19.8%.

Let’s see how things are shaping up for this quarter.

What Will Drive Growth in Q4?

Bristol-Myers’ key immuno-oncology drug, Opdivo is expected to be the primary revenue driver in the fourth quarter, with several line extensions in the past year. Earlier in 2018, Opdivo was approved as a monotherapy for the treatment of metastatic small cell lung cancer (SCLC) in third-line setting in patients who have received platinum-based chemotherapy and at least one other line of therapy. The drug also received approval for treating microsatellite instability high or mismatch repair deficient metastatic colorectal cancer, in combination with Yervoy in second-line setting in the United States.

The European Commission recently approved the combination of Opdivo plus Yervoy for the first-line treatment of patients with intermediate- and poor-risk advanced renal cell carcinoma (RCC). Opdivo has already captured 30% share of new patients in the first-line RCC market.

The drug, which is approved for multiple indications, has generated sales of $1.8 billion in the third quarter and $4.9 billion in the first nine months of 2018, increasing 42% and 37%, respectively, from the year-ago period.

Yervoy’s line extension in pediatric patients aged 12 years or older with unresectable or metastatic melanoma was approved in Europe. The FDA approved the drug in combination with Opdivo for first-line treatment of RCC. Label expansion of the drug should further boost sales.

Oncology drug, Sprycel is also maintaining momentum. The European Commission approved a line extension of Sprycel in pediatric patients with Ph+ chronic myeloid leukemia. The FDA also approved the drug for the treatment of pediatric patients aged one year or older, with newly diagnosed Philadelphia chromosome-positive (Ph+) acute lymphoblastic leukemia (ALL), in combination with chemotherapy. We expect the recent label expansion of the drug to boost sales. Cardiovascular drug, Eliquis also showed strong performance in the first nine months of 2018, with sales growing 35% from the year-ago quarter. In fact, robust sales are expected in the fourth quarter too, driven by expansion in market share.

However, the Hepatitis C and HIV businesses continue to face competitive pressure. Sales for the franchise are expected to decline.

Investors will also focus on further updates on the company’s recent announcement of acquiring Celgene Corporation (CELG - Free Report) for $74 billion. The impending acquisition will result in a specialty biopharma company with a strong oncology portfolio and diverse pipeline in the therapeutic areas of inflammatory, immunologic and cardiovascular diseases. Bristol-Myers was pursuing an acquisition for quite some time now to bolster its portfolio. While its blockbuster immuno-oncology drug, Opdivo continues to perform well on the back of label expansions, pricing concerns and stiff competition in the immuno-oncology space have limited market share gains.

The Zacks Consensus Estimate for fourth-quarter sales and earnings is pegged at $5.98 billion and 85 cents, respectively.

Earnings Whispers

Our proven model does not conclusively show that Bristol-Myers will beat earnings 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) for this to happen.

Earnings ESP: The company’s Earnings ESP is -0.12%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Bristol-Myers has a Zacks Rank #3, which is favorable. However, the company’s negative Earnings ESP makes surprise prediction difficult.

Conversely, we caution against the Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Bristol-Myers Squibb Company Price, Consensus and EPS Surprise

 

Bristol-Myers Squibb Company Price, Consensus and EPS Surprise | Bristol-Myers Squibb Company Quote

Stocks to Consider

Here are some stocks you might want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.

AbbVie Inc. (ABBV - Free Report) is scheduled to release its results on Jan 25. The company has an Earnings ESP of +2.65% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amgen, Inc. (AMGN - Free Report) is scheduled to release its results on Jan 29. The company has an Earnings ESP of +0.25% and a Zacks Rank #2.

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