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Bristol-Myers (BMY) Misses on Q4 Earnings, Beats on Sales

Bristol-Myers Squibb Company 's BMY reported a mixed fourth quarter, with earnings missing expectations while sales beating the same. Shares declined around 2% in pre-market trading .

In the past one year, Bristol-Myers' share price was down 21%, compared unfavorably with the 4.6% decrease witnessed by the Zacks classified Large-Cap Pharma industry.

Earnings Miss

The company's fourth-quarter 2016 earnings came in at 63 cents per share, missing the Zacks Consensus Estimate of 66 cents but increasing 66% from the year-ago period.

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Sales Beat

Total revenue of $5.24 billion was above the Zacks Consensus Estimate of $5.15 billion. Moreover, reported revenues jumped 22% from the year-ago quarter. Strong product sales drove the top line in the reported quarter.

Quarterly Details

Global revenues were up 24%, when adjusted for foreign exchange impact.

Sales in the U.S. improved 20% to $2.7 billion, while international revenues improved 25%. Adjusted for foreign exchange impact, international revenues were up 28%.

Leukemia drug Sprycel raked in sales of $494 million, up 15%. Melanoma drug Yervoy contributed $264 million to the top line during the reported quarter, up 23%.

Opdivo, which is approved for multiple cancer indications, generated revenues of $1.3 billion, higher than $920 million in the third quarter of 2016.

However, performance of key drugs in the Virology unit was disappointing. Sales of Baraclude declined 4% to $296 million. Both the Reyataz and Sustiva franchises deteriorated 24% and 21% to $206 million and $246 million, respectively.

Nevertheless, sales of Eliquis were $948 million during the reported quarter, up 57% year over year. Bristol-Myers has a partnership with Pfizer Inc. PFE for Eliquis. Bristol-Myers' HCV franchise contributed $226 million to its top line, down 51%. Orencia revenues were up 14% to $625 million.

Adjusted research and development (R&D) expenses in the quarter increased 27% to $1.4 billion while marketing, selling and administrative expenses dipped 3% to $1.5 billion.

Gross margin was 73.6% in the quarter, compared with 77.8% in the year-ago quarter, primarily due to product mix.

2016 Results

Full-year 2016 sales rose 17% to $19.43 billion, slightly above the Zacks Consensus Estimate of $19.29 billion.

Adjusted earnings for 2016 were $2.83 per share, up 41% year over year but falling short of the Zacks Consensus Estimate of $2.85. Earnings were in line with the guidance range of $2.80 to $2.90 per share.

2017 Guidance

Bristol-Myers provided its earnings guidance for 2017. The company expects earnings in the range of $2.70 to $2.90 per share. The Zacks Consensus Estimate for earnings is pegged at $2.92.

R&D expenses are expected to increase in the high-single digit range. Marketing, selling and administrative expenses are anticipated to decrease in mid- to high- single-digit range.

Bristol-Myers is transforming its operating model to focus resources on the company's highest priorities, accelerate its pipeline and streamline the infrastructure. The company expects operating expenses to be roughly flat with 2016 levels through 2020.

Bristol-Myers Squibb Company Price and EPS Surprise

Bristol-Myers Squibb Company Price and EPS Surprise | Bristol-Myers Squibb Company Quote

Our Take

Bristol-Myers' fourth-quarter results were mixed with the company beating on revenues but missing on earnings expectations. Nevertheless, robust sales of drugs like Opdivo, Orencia, Eliquis, Sprycel and Yervoy should continue driving top line growth. Meanwhile, we are positive on Bristol-Myers' efforts to develop its pipeline.

Bristol-Myers carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Anika Therapeutics Inc. ANIK and Sunesis Pharmaceuticals, Inc. SNSS . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Anika's earnings estimates for 2016 and 2017 were up 3.9% and 0.5%, respectively, over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%.

Sunesis' loss estimates narrowed 5.06% and 8.80% for 2016 and 2017, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.

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Bristol-Myers Squibb Company (BMY): Free Stock Analysis Report

Pfizer, Inc. (PFE): Free Stock Analysis Report

Anika Therapeutics Inc. (ANIK): Free Stock Analysis Report

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


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

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