Will AbbVie (ABBV) Surprise This Earnings Season? - Analyst Blog


AbbVie Inc. ( ABBV ) is scheduled to report its second-quarter 2014 results before the opening bell on Jul 25. Last quarter, the company posted a positive earnings surprise of 5.88%. The four-quarter trailing average beat is 3.40%. Let's see how things are shaping up for this announcement.

Factors at Play

Revenues are expected to remain under pressure as key products including TriCor/Trilipix and Niaspan are facing generic competition. Both TriCor/Trilipix (down 81.8%) and Niaspan (down 75%) revenues declined in the U.S. in the first quarter

However, AbbVie's lead product, Humira should continue performing well and help offset the impact of genericization. Late last month, the company raised its 2014 guidance ($3.06 to $3.16 per share) on the strength of its underlying business performance so far this year. The positive trends are expects to continue for the rest of the year including the second quarter.

We expect investor focus to remain on additional details regarding the upcoming AbbVie- Shire ( SHPG ) acquisition agreement (read more: AbbVie Set to Acquire UK-Based Shire in Q4 )

Earnings Whispers?

Our proven model does not conclusively show that AbbVie is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: Earnings ESP for AbbVie is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 76 cents per share.

Zacks Rank: AbbVie carries a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, the company's ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements.

Hospira Inc. ( HSP ) has an earnings ESP of +1.79% and carries a Zacks Rank #1. It is expected to report its second-quarter results on Jul 30 before market opens.

Endo International ( ENDP ) has an earnings ESP of +4.49% and carries a Zacks Rank #2. Endo will report second quarter earnings on Jul 31 before market opens.

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ABBVIE INC (ABBV): Free Stock Analysis Report

HOSPIRA INC (HSP): Free Stock Analysis Report

ENDO INTL PLC (ENDP): Free Stock Analysis Report

SHIRE PLC-ADR (SHPG): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ABBV , HSP , ENDP , SHPG



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