We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
J&J (JNJ) to Commence Pharma Q2 Earnings Season: What's Up?
Read MoreHide Full Article
Johnson & Johnson (JNJ - Free Report) , a healthcare bellwether, will report second-quarter 2017 results on Jul 18, before the opening bell. Last quarter, the company reported a positive earnings surprise of 3.39%.
J&J’s shares have gained 13.9% so far this year, significantly ahead of the 10.8% increase witnessed by the Zacks classified Large-Cap Pharma industry.
J&J has consistently surpassed earnings expectations. The company’s earnings beat expectations in each of the last four quarters, with an average positive surprise of 2.67%.
Let's see how things are shaping up for this announcement.
Factors to Consider
J&J’s Pharma segment is expected to see sluggish growth this year compared with 2016 as quite a few products in its portfolio like Remicade and Concerta have slowed down and are facing competition. This was evident from the weaker-than-expected U.S. sales performance in the first quarter of 2017. Tough competition and increased managed care rebating/discounting for several key products hurt U.S. pharmaceutical sales in the first quarter. We do not expect any improvement in the second quarter.
In the cardiovascular metabolic space, pricing pressure and competitive payer dynamics hurt sales of Invokana and Xarelto. It remains to be seen if sales trends improve in the soon-to-be-reported quarter.
While biosimilar competition is hurting sales of its key arthritis drug Remicade outside the U.S, J&J believes that Pfizer, Inc.’s (PFE - Free Report) at-risk biosimilar launch of Inflectra has not had any significant impact in the past two quarters. Management is expected to provide an update on the impact of Pfizer’s Remicade biosimilar on second-quarter sales at the conference call.
However, in the Pharmaceutical segment, new products like Imbruvica and Darzalex are performing impressively. Other drugs like Stelara, Invega Sustenna, and Simponi should also contribute meaningfully to the top line.
Meanwhile, J&J expects no biosimilar entrants for Procrit, Zytiga, Prezista Risperdal Consta, or Invega Sustenna in the U.S. in 2017.
Though sales in the Medical Devices segment picked up in the first quarter, as expected, the Consumer segment was soft due to global consumer category slowdown across many of the company’s markets. It remains to be seen if sales improve in the Consumer segment in the second quarter.
Importantly, the acquisition of Swiss biotech, Actelion, closed last month. We do not expect any contribution from the acquisition this quarter. Management is also expected to update on the integration plans at the call.
What Our Model Indicates
Our proven model does not conclusively show that J&J is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is 0.00% as the Most Accurate estimate as well as the Zacks Consensus Estimate is pegged at $1.79. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
J&J (JNJ) to Commence Pharma Q2 Earnings Season: What's Up?
Johnson & Johnson (JNJ - Free Report) , a healthcare bellwether, will report second-quarter 2017 results on Jul 18, before the opening bell. Last quarter, the company reported a positive earnings surprise of 3.39%.
J&J’s shares have gained 13.9% so far this year, significantly ahead of the 10.8% increase witnessed by the Zacks classified Large-Cap Pharma industry.
J&J has consistently surpassed earnings expectations. The company’s earnings beat expectations in each of the last four quarters, with an average positive surprise of 2.67%.
Let's see how things are shaping up for this announcement.
Factors to Consider
J&J’s Pharma segment is expected to see sluggish growth this year compared with 2016 as quite a few products in its portfolio like Remicade and Concerta have slowed down and are facing competition. This was evident from the weaker-than-expected U.S. sales performance in the first quarter of 2017. Tough competition and increased managed care rebating/discounting for several key products hurt U.S. pharmaceutical sales in the first quarter. We do not expect any improvement in the second quarter.
In the cardiovascular metabolic space, pricing pressure and competitive payer dynamics hurt sales of Invokana and Xarelto. It remains to be seen if sales trends improve in the soon-to-be-reported quarter.
While biosimilar competition is hurting sales of its key arthritis drug Remicade outside the U.S, J&J believes that Pfizer, Inc.’s (PFE - Free Report) at-risk biosimilar launch of Inflectra has not had any significant impact in the past two quarters. Management is expected to provide an update on the impact of Pfizer’s Remicade biosimilar on second-quarter sales at the conference call.
However, in the Pharmaceutical segment, new products like Imbruvica and Darzalex are performing impressively. Other drugs like Stelara, Invega Sustenna, and Simponi should also contribute meaningfully to the top line.
Meanwhile, J&J expects no biosimilar entrants for Procrit, Zytiga, Prezista Risperdal Consta, or Invega Sustenna in the U.S. in 2017.
Though sales in the Medical Devices segment picked up in the first quarter, as expected, the Consumer segment was soft due to global consumer category slowdown across many of the company’s markets. It remains to be seen if sales improve in the Consumer segment in the second quarter.
Importantly, the acquisition of Swiss biotech, Actelion, closed last month. We do not expect any contribution from the acquisition this quarter. Management is also expected to update on the integration plans at the call.
What Our Model Indicates
Our proven model does not conclusively show that J&J is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is 0.00% as the Most Accurate estimate as well as the Zacks Consensus Estimate is pegged at $1.79. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: J&J’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Johnson & Johnson Price and EPS Surprise
Johnson & Johnson Price and EPS Surprise | Johnson & Johnson Quote
Stocks to Consider
A couple of stocks in the pharma sector that have a positive Earnings ESP and a favorable Zacks Rank are:
Merck & Co., Inc. (MRK - Free Report) has an Earnings ESP of +1.15% and a Zacks Rank #2. The company is scheduled to release results on Jul 28.
Gilead Sciences, Inc. (GILD - Free Report) is scheduled to release results on Jul 26. The company has an Earnings ESP of +0.92% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>