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Drug Stock Q3 Earnings Roster for Oct 26: GILD, BMY & More

The third-quarter earnings season is off to a strong start.  The results of the companies that have reported numbers show that earnings and revenue growth pace is accelerating from the first two quarters. In particular, revenue growth has shown significant momentum as evident from the proportion of positive revenue surprises. Total earnings for the S&P 500 index for the third quarter are expected to be up 3% on 4.9% higher revenues.

As of Oct 20, 2017, 87 S&P 500 companies which account for 24.7% of index’s total market capitalization have reported results. Results reveal that earnings for these companies are up 9.4% from the year-ago quarter on a 7.3% increase in revenues. Among these, 71.3% beat earnings estimates while 70.1% beat revenue estimates.

Medical Sector Performance

The Medical sector has performed relatively well till date and this quarter is not going to be any different as per estimates. Of the 5.4% companies that have reported so far, 66.7% beat on revenues while all the companies surpassed earnings expectations. Going forward, the sector is expected to record year-over-year growth of 4.8% in revenues and 1.9% in earnings in Q3.

The bellwether of the sector, Johnson & Johnson JNJ reported better-than-expected third-quarter 2017 results and raised its outlook. Swiss giant Novartis AG NVS too beat on both earnings and sales on the back of new drugs like Cosentyx and Entresto. Eli Lilly and Company LLY also reported better-than-expected results in the third quarter.

Here we have four major biotech giants that are set to report third-quarter results on Oct 26. Let's see how things are shaping up for these:

Gilead Sciences Inc. GILD is expected to beat expectations when it reports after the market closes. Per the Zacks model a stock needs to have both a positive http://www.zacks.com/earnings/earnings-surprise-predictions/">Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat the Zacks Consensus Estimate.

Gilead’s track record is pretty mixed, with the company beating estimates in two of the last four and missing in two. Last quarter, the company beat expectations by 17.4%. Overall, the company recorded an average positive earnings surprise of 6.4%. Gilead currently carries a Zacks Rank #3 and an Earnings ESP of +0.57%. The combination of Zacks Rank #3 and a positive ESP makes us confident of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Strong HIV performance and other antiviral product sales are being driven by continued uptake of tenofovir alafenamide (TAF) based products — Genvoya, Descovy and Odefsey. We expect the trend to continue in the third quarter as well. Genvoya has already become the most prescribed regimen for both treatment-naïve and switch patients since its launch. This should drive the non-HCV product sales.  The TAF-based regimens now represent 51% of total Gilead HIV prescription volume following the launch of Genvoya and Odefsey and Descovy in 2016. Specifically, Genvoya is now the company’s bestselling HIV product with a treatment-naïve patient share of 41%. The Zacks Consensus estimate for Genvoya stands at $919 million. Strong uptake for Truvada for use in the pre-exposure prophylaxis setting is also expected to boost sales.  (Read more: Is Gilead Poised for a Beat This Earnings Season?)

Gilead Sciences, Inc. Price and EPS Surprise

 

Gilead Sciences, Inc. Price and EPS Surprise | Gilead Sciences, Inc. Quote

Bristol-Myers Squibb Company BMY is likely to beat expectations when it reports results before the market opens.  Bristol-Myers’ track record has been positive so far. The company delivered positive earnings surprise in three of the last four quarters and missed expectations in one. The company’s average positive earnings surprise in the last four quarters is 7.99%. The company currently carries a Zacks Rank #3 and an Earnings ESP of +0.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ high-profile immuno-oncology drug, Opdivo is expected to be the primary sales driver in the third quarter.  Meanwhile, rheumatoid arthritis drug, Orencia, received approval for treating psoriatic arthritis in the United States as well as in Europe in July. Moreover, in June, Bristol-Myers announced the availability of subcutaneous administration option for Orencia in patients with moderately to severely active polyarticular juvenile idiopathic arthritis. The label expansion and new administration option is expected to fuel growth of the drug.  (Read more: Is a Beat in Store for Bristol-Myers in Q3 Earnings?)

 

Celgene Corporation CELG is scheduled to report results before the opening bell.  Celgene has an excellent track record with the company beating earnings estimates in the last four quarters. Last quarter, the company beat expectations by 2.8%. Overall, the company has delivered an average positive surprise of 3.8%. Celgene currently carries a Zacks Rank #3 and ESP of +0.08%. The combination of Zacks Rank #3 and a positive ESP makes us confident of an earnings beat.

We expect the company to beat estimates once again on the back of strong performance of key drug Revlimid.  The drug performed well in the first half and combated the challenges of uneven buying patterns and coverage gap. Continued momentum in core indication, label expansion and global launches should help the product to keep contributing to the top line. The Zacks Consensus Estimate for the drug currently stands at $2.1 billion. (Read more: Is Celgene Poised for a Beat This Earnings Season?)

Celgene Corporation Price and EPS Surprise

 

Celgene Corporation Price and EPS Surprise | Celgene Corporation Quote

Alexion Pharmaceuticals, Inc. ALXN is scheduled to report results before the opening bell. In the last quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Also, Alexion’s track record is excellent as it has consistently beaten expectations in the last four quarters, with an average positive earnings surprise of 11.12%. The company currently carries a Zacks Rank #3 with an ESP of -0.81%. This makes surprise prediction difficult. Alexion’s blockbuster drug, Soliris, continues to perform well. Alexion continues to identify and treat a consistently high number of new patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) with Soliris, across its 50-country operating platform. Alexion is also working on expanding Soliris’ label into additional indications. Label expansion into additional indications would give Soliris access to a higher patient population and increase the commercial potential of the drug significantly.

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Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report
 
Eli Lilly and Company (LLY): Free Stock Analysis Report
 
Novartis AG (NVS): Free Stock Analysis Report
 
Johnson & Johnson (JNJ): Free Stock Analysis Report
 
Alexion Pharmaceuticals, Inc. (ALXN): Free Stock Analysis Report
 
Gilead Sciences, Inc. (GILD): Free Stock Analysis Report
 
Celgene Corporation (CELG): Free Stock Analysis Report
 
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