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Why Is AbbVie (ABBV) Down 2.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for AbbVie (ABBV - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AbbVie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AbbVie Q4 Earnings & Sales Top, 2021 Outlook Bright
AbbVie reported earnings of $2.92 per share for the fourth quarter of 2020, comfortably beating the Zacks Consensus Estimate of $2.85 and exceeding the guided range of $2.83-$2.85. Earnings rose 32.1% year over year
Revenues of $13.90 billion beat the Zacks Consensus Estimate of $13.72 billion as well as the guided range of approximately $13.8 billion. Sales rose 59.2% year over year on a reported basis. However, on a comparable operational basis, revenues increased 6.8%. The comparable operational growth rate includes full quarter, current year, and historical results for Allergan on a pro-forma basis and are presented on a constant currency basis.
Sales growth was driven by higher sales in Immunology and oncology/hematology franchises though COVID-19 continued to hurt sales of some products. A rapid recovery in Aesthetics sales also boosted total revenues in the quarter.
Quarter in Details
In the immunology franchise, Humira sales rose 4.8% (up 4.4% on a comparable operational basis) to $5.15 billion as higher U.S. sales were offset by a decline in international markets.
Sales in the United States climbed 8.2% to $4.29 billion. Humira sales in the ex-U.S. markets were down 11.4% on an operational basis and 9.4% on a reported basis to $859 million. International sales were severely impacted by the launch of several direct biosimilar drugs in Europe and other international markets.
In 2021, Humira is expected to record revenue growth of approximately 8% in the United States. International Humira sales are expected to approach $3.0 billion.
New immunology drugs, Skyrizi and Rinvoq registered sales of $525 million and $281 million, respectively. In the previous quarter, Skyrizi and Rinvoq had recorded sales of $435 million and $215 million, respectively. Strong sequential growth in sales of both drugs in the past couple of quarters reflects strong uptake.
In 2021, AbbVie expects combined Rinvoq and Skyrizi revenues of approximately $4.6 billion, which is almost double from 2020 levels based on their continued strong uptake in RA and psoriasis as well as Rinvoq’s anticipated approvals in PSA, ankylosing spondylitis and atopic dermatitis later in 2021. Skyrizi global sales are expected to be approximately $2.9 billion while Rinvoq global sales are expected to be approximately $1.7 billion.
AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales rose 15.5% on an operational basis to $1.79 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.
Fourth-quarter net revenues from Imbruvica were $1.42 billion, up 9.8% year over year. U.S. sales of Imbruvica grossed $1.17 billion, up 8.6% from the year-ago figure. AbbVie’s share of profit from International sales of the drug rose 15.7% to $259 million.
Venclexta generated revenues of $365 million in the reported quarter, reflecting growth of 45% year over year on an operational basis.
In 2021, AbbVie expects its hem/onc portfolio to grow at a double-digit rate with Imbruvica global revenues of approximately $5.7 billion and Venclexta global sales of approximately $1.8 billion.
In Aesthetics franchise, Botox Cosmetic net revenues were $493 million, up 9.1% on a comparable operational basis. Juvederm Collection of filler recorded sales of $331 million, down 4% on a comparable operational basis. Sales of both the products demonstrated a rapid V-shaped recovery from the COVID-19 pandemic in the second half of 2020.
In 2021, AbbVie expects global aesthetics franchise to generate global sales of approximately $4.5 billion, including approximately $1.8 billion from Botox Cosmetic and approximately $1.3 billion from Juvederm. In fact, AbbVie expects the aesthetics business to grow in the high-single digit range over the next decade.
In Neuroscience franchise, Botox Therapeutic net revenues decreased 1% year over year on a comparable operation basis to $567 million. Vraylar sales were up 38% to $401 million. Duodopa sales rose 4.6% to $129 million. New drug Ubrelvy recorded revenues of $65 million in the quarter compared with $38 million in the previous quarter.
In 2021, AbbVie expects its neuroscience portfolio to grow at a double-digit rate to approximately $5.7 billion, including Botox Therapeutic sales of approximately $2.3 billion, Vraylar sales of approximately $1.8 billion, and Ubrelvy sales of approximately $400 million.
In Eye Care, Restasis sales of $344 million declined 1.0% on a comparable operational basis. In 2021, Eye Care sales are expected to be approximately $2.9 billion. No generic competition is expected for Restasis in the first half of the year.
In Women’s Health, Lo Loestrin’s sales of $142 million declined 14.1% on a comparable operational basis. Orilissa/Oriahnn recorded sales of $38 million, up 10.7% year over year.
Among other key drugs. Mavyret sales totaled $481 million, down 24.9% on a comparable operational basis.
Costs Rise
Adjusted gross margin was 81.8% in the quarter. Adjusted SG&A expenses increased 64% to $3.09 billion while R&D expenses were $1.75 billion in the fourth quarter, rising 31.6% year over year. Adjusted operating margin represented 46.9% of sales, an improvement of 230 basis points versus the prior year.
2020 Results
AbbVie reported revenues of $45.8 billion, up 37.7% year over year. The company’s adjusted earnings for 2020 were $10.56 per share, up 18.1% from the year-ago period.
2021 Guidance
AbbVie issued its financial guidance for 2021. The company expects adjusted EPS to be in the range of $12.32-$12.52, suggesting year-over-year growth of 17.6% at the midpoint. In 2021, AbbVie expects comparable operational sales growth of approximately 9.4%. Currency is expected to have a 1% favorable impact on full-year comparable sales growth.
AbbVie expects the pandemic to have a negative impact on its sales in the first of 2021 but the impact is expected to moderate from 2020 levels.
Adjusted gross margin is expected to be approximately 83% of sales in 2021. R&D expenses are expected to be approximately $6.6 billion and adjusted SG&A expense are expected to be approximately $11.8 billion in 2021.
Adjusted operating margin is expected to be approximately 50% of sales, representing an improvement of roughly 200 basis points versus 2020.
First-Quarter 2021 Outlook
First-quarter earnings are expected between $2.79 and $2.83 per share. AbbVie expects adjusted revenues of approximately $12.7 billion in the first quarter. Adjusted operating margin is expected to be approximately 50% of sales.
Long Term Guidance
The company also provided long-term sales outlook. It expects sales growth to remain strong till Humira losses patent exclusivity in 2023. AbbVie expects sales to decline in 2023 but modest top-line growth in 2024. It expects strong sales growth to return in 2025, followed by a high-single digit compound annual growth rate till 2030.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted -8.1% due to these changes.
VGM Scores
Currently, AbbVie has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AbbVie has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is AbbVie (ABBV) Down 2.7% Since Last Earnings Report?
A month has gone by since the last earnings report for AbbVie (ABBV - Free Report) . Shares have lost about 2.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AbbVie due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
AbbVie Q4 Earnings & Sales Top, 2021 Outlook Bright
AbbVie reported earnings of $2.92 per share for the fourth quarter of 2020, comfortably beating the Zacks Consensus Estimate of $2.85 and exceeding the guided range of $2.83-$2.85. Earnings rose 32.1% year over year
Revenues of $13.90 billion beat the Zacks Consensus Estimate of $13.72 billion as well as the guided range of approximately $13.8 billion. Sales rose 59.2% year over year on a reported basis. However, on a comparable operational basis, revenues increased 6.8%. The comparable operational growth rate includes full quarter, current year, and historical results for Allergan on a pro-forma basis and are presented on a constant currency basis.
Sales growth was driven by higher sales in Immunology and oncology/hematology franchises though COVID-19 continued to hurt sales of some products. A rapid recovery in Aesthetics sales also boosted total revenues in the quarter.
Quarter in Details
In the immunology franchise, Humira sales rose 4.8% (up 4.4% on a comparable operational basis) to $5.15 billion as higher U.S. sales were offset by a decline in international markets.
Sales in the United States climbed 8.2% to $4.29 billion. Humira sales in the ex-U.S. markets were down 11.4% on an operational basis and 9.4% on a reported basis to $859 million. International sales were severely impacted by the launch of several direct biosimilar drugs in Europe and other international markets.
In 2021, Humira is expected to record revenue growth of approximately 8% in the United States. International Humira sales are expected to approach $3.0 billion.
New immunology drugs, Skyrizi and Rinvoq registered sales of $525 million and $281 million, respectively. In the previous quarter, Skyrizi and Rinvoq had recorded sales of $435 million and $215 million, respectively. Strong sequential growth in sales of both drugs in the past couple of quarters reflects strong uptake.
In 2021, AbbVie expects combined Rinvoq and Skyrizi revenues of approximately $4.6 billion, which is almost double from 2020 levels based on their continued strong uptake in RA and psoriasis as well as Rinvoq’s anticipated approvals in PSA, ankylosing spondylitis and atopic dermatitis later in 2021. Skyrizi global sales are expected to be approximately $2.9 billion while Rinvoq global sales are expected to be approximately $1.7 billion.
AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales rose 15.5% on an operational basis to $1.79 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.
Fourth-quarter net revenues from Imbruvica were $1.42 billion, up 9.8% year over year. U.S. sales of Imbruvica grossed $1.17 billion, up 8.6% from the year-ago figure. AbbVie’s share of profit from International sales of the drug rose 15.7% to $259 million.
Venclexta generated revenues of $365 million in the reported quarter, reflecting growth of 45% year over year on an operational basis.
In 2021, AbbVie expects its hem/onc portfolio to grow at a double-digit rate with Imbruvica global revenues of approximately $5.7 billion and Venclexta global sales of approximately $1.8 billion.
In Aesthetics franchise, Botox Cosmetic net revenues were $493 million, up 9.1% on a comparable operational basis. Juvederm Collection of filler recorded sales of $331 million, down 4% on a comparable operational basis. Sales of both the products demonstrated a rapid V-shaped recovery from the COVID-19 pandemic in the second half of 2020.
In 2021, AbbVie expects global aesthetics franchise to generate global sales of approximately $4.5 billion, including approximately $1.8 billion from Botox Cosmetic and approximately $1.3 billion from Juvederm. In fact, AbbVie expects the aesthetics business to grow in the high-single digit range over the next decade.
In Neuroscience franchise, Botox Therapeutic net revenues decreased 1% year over year on a comparable operation basis to $567 million. Vraylar sales were up 38% to $401 million. Duodopa sales rose 4.6% to $129 million. New drug Ubrelvy recorded revenues of $65 million in the quarter compared with $38 million in the previous quarter.
In 2021, AbbVie expects its neuroscience portfolio to grow at a double-digit rate to approximately $5.7 billion, including Botox Therapeutic sales of approximately $2.3 billion, Vraylar sales of approximately $1.8 billion, and Ubrelvy sales of approximately $400 million.
In Eye Care, Restasis sales of $344 million declined 1.0% on a comparable operational basis. In 2021, Eye Care sales are expected to be approximately $2.9 billion. No generic competition is expected for Restasis in the first half of the year.
In Women’s Health, Lo Loestrin’s sales of $142 million declined 14.1% on a comparable operational basis. Orilissa/Oriahnn recorded sales of $38 million, up 10.7% year over year.
Among other key drugs. Mavyret sales totaled $481 million, down 24.9% on a comparable operational basis.
Costs Rise
Adjusted gross margin was 81.8% in the quarter. Adjusted SG&A expenses increased 64% to $3.09 billion while R&D expenses were $1.75 billion in the fourth quarter, rising 31.6% year over year. Adjusted operating margin represented 46.9% of sales, an improvement of 230 basis points versus the prior year.
2020 Results
AbbVie reported revenues of $45.8 billion, up 37.7% year over year. The company’s adjusted earnings for 2020 were $10.56 per share, up 18.1% from the year-ago period.
2021 Guidance
AbbVie issued its financial guidance for 2021. The company expects adjusted EPS to be in the range of $12.32-$12.52, suggesting year-over-year growth of 17.6% at the midpoint. In 2021, AbbVie expects comparable operational sales growth of approximately 9.4%. Currency is expected to have a 1% favorable impact on full-year comparable sales growth.
AbbVie expects the pandemic to have a negative impact on its sales in the first of 2021 but the impact is expected to moderate from 2020 levels.
Adjusted gross margin is expected to be approximately 83% of sales in 2021. R&D expenses are expected to be approximately $6.6 billion and adjusted SG&A expense are expected to be approximately $11.8 billion in 2021.
Adjusted operating margin is expected to be approximately 50% of sales, representing an improvement of roughly 200 basis points versus 2020.
First-Quarter 2021 Outlook
First-quarter earnings are expected between $2.79 and $2.83 per share. AbbVie expects adjusted revenues of approximately $12.7 billion in the first quarter. Adjusted operating margin is expected to be approximately 50% of sales.
Long Term Guidance
The company also provided long-term sales outlook. It expects sales growth to remain strong till Humira losses patent exclusivity in 2023. AbbVie expects sales to decline in 2023 but modest top-line growth in 2024. It expects strong sales growth to return in 2025, followed by a high-single digit compound annual growth rate till 2030.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted -8.1% due to these changes.
VGM Scores
Currently, AbbVie has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AbbVie has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.