The Q1 earnings season is in full swing with financial results from 288 S&P 500 members or 63.8% of the index already out as of Apr 28, 2017, according to the latest Earnings Preview report.
Total earnings for these index members jumped 13.7% from the year-ago quarter driven by 8.2% improvement in revenues. The beat ratio was 76.4% for earnings and 68.1% for revenues.
Johnson & Johnson JNJ began the earnings season for the pharma sector with a lower-than-expected performance in the first quarter. This left the investment community worrying about the performance of the other pharma companies in the quarter. However, quite a few large pharma companies released their earnings last week and the picture is not as bad as anticipated.
Among the pharma bigwigs that reported last week, Bristol-Myers Squibb Company BMY , Vertex Pharmaceuticals Incorporated (VRTX), AbbVie ABBV and Biogen, Inc. BIIB reported better-than-expected Q1 results. However, it was a mixed quarter for Amgen, Inc. AMGN , Celgene Corporation CELG and Eli Lilly and Company LLY as all three beat earnings expectations but missed sales estimates.
Three pharma/biotech giants are scheduled to release their earnings result on May 2. Let's see how things are shaping up for these three pharma/biotech companies that are set to report Q1 results on May 2.
Merck & Co., Inc.MRK
Merck & Company, Inc. Price and EPS Surprise
Merck is scheduled to release Q1 earnings before market opens. The company posted a positive surprise of 1.14% in the last quarter. Moreover, the company's performance has been encouraging in the recent past with its earnings surpassing expectations in all of the trailing four quarters with an average positive surprise of 4.03%.
However, our proven model does not conclusively show thatMerck is likely to beat on earnings this quarter. Though the company's favorable Zacks Rank #3 (Hold) increases the predictive power of the ESP, its Earnings ESP of 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter . The
We expect investors to remain focused on the company's performance as well as the sales ramp-up of newly launched Zinplava alongside pipeline updates at the Q1 earnings call. (Read More: What's in Store for Merck this Earnings Season? ).
Pfizer, Inc. Price and EPS Surprise
Pfizer, which is scheduled to release earnings before the market opens, posted a negative surprise of 6% in the last quarter. The company's performance has been mixed with earnings beating expectations in two of the last four quarters and missing the same in the other two. It had an average positive surprise of 4.36%.
Our proven show thatPfizer is likely to beat on earnings this quarter. This is because Pfizer has a favorable Zacks Rank #3 (Hold) and an Earnings ESPof +1.49%. The Zacks Consensus Estimate for Q1 is pegged at 67 cents per share.
Our previous article did not show that Pfizer was likely to beat on earnings this quarter. However, estimates changed thereafter and we are now reasonably certain of an earnings beat this season. We expect investors to remain focused on the performance company's new products like Xalkori (lung cancer), Xeljanz (rheumatoid arthritis) and Ibrance (breast cancer) as well as older product like Lyrica (neuropathic pain), which are expected to contribute to the top line meaningfully in Q1. (Read More: Pfizer Q1 Earnings: Will it Pull Off a Surprise? ).
Gilead Sciences Inc.GILD
Gilead Sciences, Inc. Price and EPS Surprise
Gilead is scheduled to announce results after the closing bell. The company'searnings history is mixed. Its earnings surpassed expectations in two of the last four quarters and missing the same in the other two. It hadan average positive surprise to 2.88%.
Last quarter, Gilead posted a positive surprise of 14.29%. The Zacks Consensus Estimate for Q1 is pegged at $2.17.
The company has an Earnings ESP of +2.77% and a Zacks Rank #3 (Hold), which makes us reasonably confident of an earnings beat. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
We expect investors to remain focused on the company's newly launched TAF-based products - Genvoya, Odefsey and Descovy - which are performing well in both the U.S. and EU. (Read More: Why Gilead Might Surprise This Earnings Season )
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