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Big Pharma Q2 Earnings Releases on Jul 25: LLY, BIIB, AMGN

The second-quarter reporting cycle seems to have gotten off to a good start, with an abundance of positive surprises, particularly on the revenue front. Meanwhile, earnings and revenue growth also bettered expectations.

As of Jul 21, 2017, 97 S&P 500 members, accounting for 28.1% of the index’s total market capitalization, reported results, according to  Earnings Preview.

Total earnings for these 97 index members were up 8.4% from the year-ago quarter on a 5.1% improvement in revenues. The beat ratio was 78.4% for earnings and 72.2% for revenues.

The earnings momentum is expected to continue through the season. Per the report, total earnings for S&P 500 companies in the second quarter are expected to grow 8.6% year over year on 4.7% higher revenues. This follows 13.3% earnings growth in the first quarter on 7% increase in revenues, the highest in almost two years.

Among the pharma bigwigs, only Johnson & Johnson JNJ and Swiss company Novartis AG NVS have reported so far. J&J reported mixed second-quarter results, beating on earnings but missing on sales.  This was the third consecutive sales miss for J&J due to a a slowdown in pharmaceutical product sales. However, J&J is optimistic that sales growth will accelerate in the second half of 2017. On the other hand, Novartis’ second-quarter results were encouraging as the company beat both earnings and sales estimates. However, Sandoz’s performance was disappointing due to pricing pressure.

Here we have three pharma giants that are set to report second-quarter results on Jul 25. Let's see how things are shaping up for this quarter.

Eli Lilly and Company LLY

Lilly, which is scheduled to release earnings before the market opens, had delivered a positive earnings surprise of 2.08% last quarter. Lilly’s earnings performance has been mixed with earnings missing expectations in two of the last four quarters and  beating in the other two, resulting in an average negative surprise of 2.28%.

Eli Lilly and Company Price and EPS Surprise


Eli Lilly and Company Price and EPS Surprise | Eli Lilly and Company Quote

For this quarter, Lilly has an">Earnings ESP of 0.00% and a Zacks Rank #2 (Buy). The Zacks Consensus Estimate is pegged at $1.04 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

New products like Trulicity, Cyramza, Taltz and Jardiance have supported the top line in the past few quarters. We expect the trend to continue in the second quarter of 2017 as well. However, a decline in the sales of Alimta, Cymbalta and Zyprexa are expected to continue due to the loss of exclusivity. (Read More: Is a Beat in the Cards for Eli Lilly in Q2 Earnings?).

Our previous article showed that Lilly was likely to beat on earnings this quarter. However, estimates changed thereafter and we are not certain of a beat this earnings season.

Biogen Inc. BIIB

Biogen, a well-known name in the multiple sclerosis (MS) market,is also scheduled to announce results before the opening bell. Biogen’s earnings performance has been pretty impressive so far, having delivered back-to-back positive surprises. The average earnings beat over the last four quarters is 5.29%.

Last quarter, the company delivered a positive earnings surprise of 4.63%.

Biogen Inc. Price and EPS Surprise


Biogen Inc. Price and EPS Surprise | Biogen Inc. Quote

The company has an Earnings ESP of -1.84% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biogen expects relatively stable demand for both its key MS drugs, Tecfidera and Tysabri in 2017 as patient growth in ex-U.S. markets offset the modest decline in the U.S due to rising competition from drugs like Roche’s Ocrevus. (Read More: Can Biogen Keep the Earnings Streak Alive in Q2?)

Amgen, Inc. AMGN

The biotech giant is expected to report after market hours. Amgen delivered a positive earnings surprise of 5% in the last quarter. Amgen’s performance has been pretty impressive, with the company reporting positive surprises consistently. The average earnings beat over the last four quarters is 5.31%.

Amgen Inc. Price and EPS Surprise


Amgen Inc. Price and EPS Surprise | Amgen Inc. Quote

The company has an Earnings ESP of -0.32% and a Zacks Rank #3.

While Amgen’s growth drugs like Prolia & Xgeva might continue to do well, biosimilar competition and slowdown in sales of mature products can put pressure on sales growth. (Read More: Amgen to Report Q2 Earnings: What's in the Cards?)

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