Bristol-Myers Squibb Company
) is scheduled to release its fourth-quarter 2012 results before
the opening bell on Thursday, Jan 24.
In the last quarter, it delivered a negative earnings surprise
of 9.8% as the genericization of its key drugs, blood thinner
Plavix and hypertension treatment Avapro in the US has resulted
in significant loss of revenues.Let's see how things are shaping
up prior to the announcement of the fourth quarter results.
Factors to Consider this Quarter
Bristol-Myers is looking to combat the generic threat hanging
over its key drugs through partnering deals and acquisitions and
introducing new products to augment its product portfolio. In Dec
2012, the US Food and Drug Administration (FDA) cleared blood
thinner Eliquis, co-developed with
). Successful commercialization of Eliquis should boost
Bristol-Myers' top line significantly since the drug offers great
commercial potential. Moreover, in Aug 2012, Bristol-Myers
acquired Amylin Pharmaceuticals, Inc. in a bid to diversify its
business to combat the generic threat and bolster its position in
the lucrative diabetes market.
The efforts of Bristol-Myers notwithstanding, results in the
fourth quarter are again likely to be hurt by the genericization
of Plavix and Avapro. The Zacks Consensus Estimate for the fourth
quarter has moved down by a cent to 43 cents per share over the
last 7 days due to the obvious negative sentiment.
Our proven model does not conclusively show that Bristol-Myers
is likely to beat the Zacks Consensus Estimate in the fourth
quarter. That is because a stock needs to have both a positive
Earnings ESP (Read:
) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2
(Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately,
this is not the case here as elaborated below.
Negative Zacks ESP
: This is because the Most Accurate estimate stands at 40 cents
while the Zacks Consensus is higher at 43 cents. This results in
a difference of -7.0%.
Zacks Rank #3 (Hold)
: Bristol-Myers' Zacks Rank of 3, however, increases the
predictive power of ESP. That said we also need to have a
positive ESP to be confident for an earnings surprise call.
Other Stocks to Consider
Here are some other companies you may want to consider on the
basis of our model which shows that they have the right
combination of elements to post an earnings beat this
) has Earnings ESP of +1.35% and carries a Zacks Rank #2
) has Earnings ESP of +4.69% and carries a Zacks Rank #2
BRISTOL-MYERS (BMY): Free Stock Analysis
MYLAN INC (MYL): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis
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