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BIIB, LLY Q2 Earnings on Jul 24: Here are the Key Predictions
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The second-quarter earnings season is in full swing. So far, the earnings story has been good with positive earnings surprises on the back of strong revenue growth. Although estimated earnings growth of 21% for the second quarter is below the first-quarter level of 24.6%, the momentum is strong. As the season unfolds, we may see growth on par with the preceding quarter. This week will be a busy one with 750 companies including 175 S&P 500 members expected to report.
Story So Far
Till the end of last week, 87 S&P 500 companies reported earnings that combined account for more than 25% of the total market capitalization of the index. According to the latest Earnings Preview, total earnings for these companies are up 20.9% from the same period last year on 10.3% higher revenues. Meanwhile, 86.2% of these companies reported positive earnings surprises while 77% beat revenue estimates.
Please note that the broader Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record year-over-year growth of 6.4% in revenues and 9.1% in earnings in the second quarter.
So far, two pharma bigwigs have reported second-quarter results. Johnson & Johnson (JNJ - Free Report) has set the stage for other companies with strong results. The company beat estimates on both counts. Although J&J lowered its earnings and sales guidance for 2018 due to unfavorable currency movement, it raised operational sales and earnings growth guidance. However, Novartis (NVS - Free Report) had a mixed quarter. While earnings missed estimates, revenues beat the same on strong sales of Cosentyx and Entresto. Both the companies belong to the large-cap pharmaceuticals sub-industry.
Here we have two other pharma bigwigs, which are scheduled to release their second-quarter earnings on Jul 24, before market open. Let's see how things are shaping up for these announcements.
What’s in Store for LLY & BIIB?
Eli Lilly and Company (LLY - Free Report) , which belongs to the large-cap pharmaceuticals sub-industry, put up an impressive performance in the last four quarters, beating expectations each time. The average positive earnings surprise was 8.20%.
The company’s stock has increased 4.8% so far this year, compared to the industry’s decline of 1.3%.
The company’s new drugs have shown strong uptake trends in the last two quarters, offsetting lower sales of established products. A few new launches in the last two quarters will also boost sales. However, animal health unit is expected to report lower sales.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of -0.58% and a Zacks Rank #2, which makes it difficult to predict an earnings beat. The Zacks Consensus Estimate is pegged at $1.31 per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
On the earnings call, investors are likely to focus on commercialization plans for Olumiant in the U.S. market and Lilly’s path forward with its strategic alternatives. (Read more: Can Lilly Keep the Earnings Streak Alive in Q2?)
Biogen Inc. (BIIB - Free Report) , from the Biomedical and Genetics sub-industry, recorded better-than-expected results in three of the trailing four quarters, with an average positive earnings surprise of 6.25%.
The company’s stock has increased 12.6% so far this year, compared to the industry’s decline of 2.4%.
Currently, Biogen carries a Zacks Rank #3 and has an Earnings ESP of -1.35%, which makes it difficult to predict an earnings beat.
The company’s multiple sclerosis (“MS”) drugs have been seeing increased competition from Roche’s (RHHBY - Free Report) newly launched Ocrevus, which is expected to continue .However, drawdown on first-quarter sales of MS drugs due to seasonality is least likely to impact second-quarter performance. Meanwhile, withdrawal of Zinbryta from the market due to safety concerns may have an unfavorable impact on the top line. Spinal muscular atrophy drug, Spinraza, will continue to see growth in international markets while U.S. market sales are likely to remain flat.
Investors are likely to focus on the company’s progression plan for its Alzheimer’s disease candidate BAN2401, following the successful completion of a mid-stage study. (Read more: Biogen to Report Q2 Earnings: What's in the Cards?)
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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BIIB, LLY Q2 Earnings on Jul 24: Here are the Key Predictions
The second-quarter earnings season is in full swing. So far, the earnings story has been good with positive earnings surprises on the back of strong revenue growth. Although estimated earnings growth of 21% for the second quarter is below the first-quarter level of 24.6%, the momentum is strong. As the season unfolds, we may see growth on par with the preceding quarter. This week will be a busy one with 750 companies including 175 S&P 500 members expected to report.
Story So Far
Till the end of last week, 87 S&P 500 companies reported earnings that combined account for more than 25% of the total market capitalization of the index. According to the latest Earnings Preview, total earnings for these companies are up 20.9% from the same period last year on 10.3% higher revenues. Meanwhile, 86.2% of these companies reported positive earnings surprises while 77% beat revenue estimates.
Please note that the broader Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record year-over-year growth of 6.4% in revenues and 9.1% in earnings in the second quarter.
So far, two pharma bigwigs have reported second-quarter results. Johnson & Johnson (JNJ - Free Report) has set the stage for other companies with strong results. The company beat estimates on both counts. Although J&J lowered its earnings and sales guidance for 2018 due to unfavorable currency movement, it raised operational sales and earnings growth guidance. However, Novartis (NVS - Free Report) had a mixed quarter. While earnings missed estimates, revenues beat the same on strong sales of Cosentyx and Entresto. Both the companies belong to the large-cap pharmaceuticals sub-industry.
Here we have two other pharma bigwigs, which are scheduled to release their second-quarter earnings on Jul 24, before market open. Let's see how things are shaping up for these announcements.
What’s in Store for LLY & BIIB?
Eli Lilly and Company (LLY - Free Report) , which belongs to the large-cap pharmaceuticals sub-industry, put up an impressive performance in the last four quarters, beating expectations each time. The average positive earnings surprise was 8.20%.
The company’s stock has increased 4.8% so far this year, compared to the industry’s decline of 1.3%.
The company’s new drugs have shown strong uptake trends in the last two quarters, offsetting lower sales of established products. A few new launches in the last two quarters will also boost sales. However, animal health unit is expected to report lower sales.
Our proven model provides some idea about the stocks that are about to release their earnings results. Per our model, a stock needs a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company has an Earnings ESP of -0.58% and a Zacks Rank #2, which makes it difficult to predict an earnings beat. The Zacks Consensus Estimate is pegged at $1.31 per share. You can see the complete list of today’s Zacks #1 Rank stocks here.
On the earnings call, investors are likely to focus on commercialization plans for Olumiant in the U.S. market and Lilly’s path forward with its strategic alternatives. (Read more: Can Lilly Keep the Earnings Streak Alive in Q2?)
Eli Lilly and Company Price and EPS Surprise
Eli Lilly and Company Price and EPS Surprise | Eli Lilly and Company Quote
Biogen Inc. (BIIB - Free Report) , from the Biomedical and Genetics sub-industry, recorded better-than-expected results in three of the trailing four quarters, with an average positive earnings surprise of 6.25%.
The company’s stock has increased 12.6% so far this year, compared to the industry’s decline of 2.4%.
Currently, Biogen carries a Zacks Rank #3 and has an Earnings ESP of -1.35%, which makes it difficult to predict an earnings beat.
The company’s multiple sclerosis (“MS”) drugs have been seeing increased competition from Roche’s (RHHBY - Free Report) newly launched Ocrevus, which is expected to continue .However, drawdown on first-quarter sales of MS drugs due to seasonality is least likely to impact second-quarter performance. Meanwhile, withdrawal of Zinbryta from the market due to safety concerns may have an unfavorable impact on the top line. Spinal muscular atrophy drug, Spinraza, will continue to see growth in international markets while U.S. market sales are likely to remain flat.
Investors are likely to focus on the company’s progression plan for its Alzheimer’s disease candidate BAN2401, following the successful completion of a mid-stage study. (Read more: Biogen to Report Q2 Earnings: What's in the Cards?)
Biogen Inc. Price and EPS Surprise
Biogen Inc. Price and EPS Surprise | Biogen Inc. Quote
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Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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