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Sanofi (SNY) to Report Q3 Earnings: What's in the Cards?

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Sanofis (SNY - Free Report) will report its third-quarter 2019 results on Oct 31, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 10.45%.

This French drugmaker surpassed earnings expectations in each of the last four quarters, delivering an average positive surprise of 7.68%.

 

Sanofi Price and EPS Surprise

 

Sanofi Price and EPS Surprise

Sanofi price-eps-surprise | Sanofi Quote

Sanofi’s shares have declined 6.8% this year so far against an increase of 0.9% for the industry.

 

Factors at Play

Sanofi’s Specialty Care and Vaccines units are likely to have performed well in third-quarter 2019, in turn, driving top-line growth. Meanwhile, divestments and strengthening regulatory requirements might reflect on Consumer Healthcare unit’s sales.

Sanofi’s Specialty Care segment, particularly, is on a strong footing with recent FDA approval of new drugs Libtayo and Cablivi, and Dupixent for its second indication in asthma. 

Dupixent sales in the third quarter are likely to have been driven by growth in atopic dermatitis indication and rapid uptake in new asthma indication. Dupixent was launched for adolescent atopic dermatitis and for chronic rhinosinusitis with nasal polyposis in the United States in mid-March and June, respectively and for the asthma indication in Japan in April which should bring in additional sales. It was approved to treat asthma indication and adolescent atopic dermatitis in Europe in May and August, respectively. Please note that Sanofi markets Dupixent in partnership with Regeneron (REGN - Free Report) .

Sales of Sanofi’s rare disease, oncology and rare blood disorder drugs are likely to have increased in the third quarter. However, we do not expect the performance of Diabetes unit to have improved in the to-be reported quarter. Sales of Sanofi’s diabetes drugs in the United States are declining due to pricing pressure and loss of Part D business. Higher rebates and lower prices are likely to have hurt sales of Sanofi/ Regeneron’s PCSK9 inhibitor, Praluent,

Also, generic/biosimilar headwinds might reflect on the Established Rx Products unit’s sales.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Sanofi this time around. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Its Earnings ESP is -4.69%. The Zacks Consensus Estimate stands at 96 cents per share. You can uncover the best stocks to buy or sell before they’re reported with ourEarnings ESP Filter.

Zacks Rank: Sanofi carries a Zacks Rank #3.

Stocks to Consider

Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings in their upcoming release:

GlaxoSmithKline (GSK - Free Report) has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is scheduled to release results on Oct 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte Corporation (INCY - Free Report) has an Earnings ESP of +1.15% and a Zacks Rank #1. The company is scheduled to release results on Oct 29.

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