Yahoo Finance Is a Beat Likely for AbbVie (ABBV) This Earnings Season?
AbbVie ABBV, slated to report fourth-quarter 2021 results on Feb 2, before market open, is expected to beat expectations. In the last reported quarter, the company delivered an earnings surprise of 3.10%.
AbbVie’s stock has gained 33.4% in the past year compared with an increase of 14.2% for the industry.
Image Source: Zacks Investment Research
The large drugmaker’s performance has been pretty impressive, with its earnings beating estimates in three of the trailing four quarters and meeting the same once. The company has a four-quarter earnings surprise of 3.02%, on average.
Factors to Consider
Strong demand for immunology drugs, aesthetics and cosmetics are expected to have driven sales in the fourth quarter of 2021.. Moreover, new drug launches in the past few quarters are likely to have brought additional sales during the fourth quarter. However, the Omicron outbreak since September 2021 could have hurt patient volumes, especially for physician-administered drugs.
Fourth-quarter earnings are expected between $3.24 and $3.28 per share. AbbVie expects adjusted revenues of approximately $15 billion, indicating year-over-year growth of more than 8%. The Zacks Consensus Estimate for earnings and revenues stands at $3.29 per share and $15.07 billion, respectively.
In immunology, Humira has been witnessing strong demand trends in the United States. Sales of the drug in the United States are likely to have increased in the fourth quarter. However, Humira’s international sales are expected to have continued their declining trend due to the impact of biosimilars in Europe. The Zacks Consensus Estimate for Humira stands at $5.41 billion.
The sales of new immunology drugs, Skyrizi and Rinvoq, reflected strong uptake during the last few quarters. The strong uptake is expected to have continued in the soon-to-be-reported quarter. The label expansion of Rinvoq and Skyrizi in Europe to include a new patient populations in the second half of 2021 is likely to have driven the sales of the drugs further during the quarter.
In December, AbbVie updated the Rinvoq label to include boxed warnings about an increased risk of serious heart-related events, cancer, blood clots, and even death following a Drug Safety Communication issued by the FDA in September. The impact of the label update on the drug’s sales in the fourth quarter of 2021 remains to be seen.
In oncology, AbbVie markets Imbruvica in partnership with Johnson & Johnson JNJ and Venclexta with Roche RHHBY. Sales of the J&J and Roche-partnered drugs are likely to have been strong in the soon-to-be-reported quarter. However, lower new patient starts in the chronic lymphocytic leukemia (CLL) indication for both J&J and Roche-partnered drugs — Imbruvica and Venclexta — due to the COVID-19 pandemic are likely to have hurt sales. The impact of increasing competition from newer therapies on sales of J&J-partnered drug, Imbruvica, remains to be seen. The Zacks Consensus Estimate for J&J-partnered drug, Imbruvica, and Roche-partnered drug, Venclexta, is pegged at $1.47 billion and $510 million, respectively.
Sales of AbbVie’s new Hepatitis C drug, Mavyret, started recovering from the pandemic impact during the second quarter, which continued in the third quarter. The recovery trend is likely to have continued in the fourth quarter too, boosting sales of the drug. The Zacks Consensus Estimate for Mavyret stands at $463 million.
Sales of AbbVie’s aesthetics products — Botox cosmetic and Juverderm — demonstrated a strong recovery during the second and third quarters of 2021, reflecting significant pent-up demand. Moreover, sales of the neuroscience franchise also showed strong growth in the first nine months of 2021. The trend is expected to have continued for both franchises in the soon-to-be-reported quarter. However, the impact of high infection rates due to the Omicron variant remains to be seen. The Zacks Consensus Estimate for aesthetics and neuroscience products stands at $1.34 billion and $1.61 billion, respectively.
Investors’ focus will likely be on any update related to the impact of Omicron-outbreak and the guidance for 2022.
Earnings Beat Likely
Our proven model predicts an earnings beat for AbbVie this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.30 per share) and the Zacks Consensus Estimate ($3.29 per share), is +0.26%.
Zacks Rank: AbbVie carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AbbVie Inc. Price and EPS Surprise
AbbVie Inc. price-eps-surprise | AbbVie Inc. Quote
Another Stock to Consider
Here is a large drug stock that has the right combination of elements to beat on earnings this time around:
Eli Lilly LLY has an Earnings ESP of +0.20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lilly’s stock has surged 13.8% in the past year. Lilly topped earnings estimates in one of the last four quarters. Lilly has a four-quarter earnings surprise of 0.54%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Roche Holding AG (RHHBY) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
