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Drug Stocks Reporting Earnings on Feb 7: GILD, MNK & More

2017 seems to have started on an encouraging note for investors when compared to the year-ago periods. Earnings growth turned positive in the last quarter and things are surely looking up as we stand in the middle of the earnings season.

As per our Earnings Preview report, approximately 275 S&P 500 members (representing 55% of the index's total market capitalization) reported quarterly results as of Feb 3. An impressive 68% of the index members beat on earnings while 54.5% surpassed top-line expectations. Moreover, earnings of these 275 index members are up 6.9% on 4.2% higher revenues. As a result, growth rates posted in the quarter are the highest recorded in the last two years with total earnings poised to set a new record.

Although estimates for the fourth quarter have come down, the magnitude of decline has been lower than the historical levels. This should boost investor optimism substantially. Around 84 companies are expected to report results this week. Hence, by the end of the week, approximately 71.8% of the total index would have reported results, thereby offering a clearer earnings picture.

How have Drug Stocks Fared So Far?

Quite a few major pharma and biotech companies have reported results so far, with the performance being mixed. Sector bellwether Johnson & Johnson JNJ posted mixed results, wherein earnings beat estimates but revenues missed the same. The same goes for bigwigs like Biogen, Inc. BIIB and AbbVie, Inc. ABBV . Eli Lilly and Company LLY and Pfizer, Inc. PFE , on the other hand, beat on revenues but missed earnings expectations. Meanwhile, Celgene's CELG fourth-quarter results were disappointing, with the company missing on both earnings and revenues.

We note that Medical is one of the sectors expected to record growth in the positive territory in the fourth quarter. Earnings for the sector are expected to improve 3.2% on revenue growth of 5.7% even though 2016 posed challenges to the pharmaceutical sector. This space was under constant scrutiny due to drug pricing issues.

As of Feb 1, 44.4% companies in the Medical sector reported results, putting up a blended beat of 33.3% (the percentage of companies that have beaten both earnings and revenue estimates). Overall, the sector has registered 11.5% earnings growth on 5.4% higher revenues.

Let's find out what's in store for a few companies scheduled to report results on Feb 7.

Biotech bigwig Gilead SciencesGILD is scheduled to report results on Feb 7. Gilead's track record was mixed, with the company beating estimates in two of the last four trailing quarters and missing the samein the other two. Overall, the company recorded an average positive earnings surprise of 2.40%. Its HCV franchise has been under competitive and pricing pressure due to declining sales of Harvoni and Sovaldi. However, growth in the HIV franchise should offset the weakness in the HCV portfolio. Gilead currently carries a Zacks Rank #3 (Hold) and has an Earnings ESP of -10.82%. You can see the complete list of today's Zacks #1 Rank stocks here . Although a favorable rank increases the predictive power of ESP, the negative ESP makes surprise prediction difficult. (Read more: Gilead Sciences Q4 Earnings: What's in the Cards? )

Gilead Sciences, Inc. Price and EPS Surprise

Gilead Sciences, Inc. Price and EPS Surprise | Gilead Sciences, Inc. Quote

Mallinckrodt PharmaceuticalsMNK is scheduled to report results on Feb. 7. The company's track record has been impressive so far. Mallinckrodt has delivered a positive average earnings surprise of 11.2% in the last four trailing quarters. However, Mallinckrodt's Specialty Generics segment continues to be a laggard. The weakness is expected to persist as stiff competition continues to hurt both volumes and prices. The company currently carries a Zacks rank #5 (Strong Sell) and has an Earnings ESP of 0.54%. The unfavorable rank makes it unlikely for Mallinckrodt to maintain its positive earnings streak this quarter. (Read more: Mallinckrodt Earnings This Quarter: Stock to Disappoint? )

Mallinckrodt PLC Price and EPS Surprise

Mallinckrodt PLC Price and EPS Surprise | Mallinckrodt PLC Quote

Bio-Techne CorporationTECH is scheduled to second-quarter report results on Feb 7. The company develops and manufactures high-quality purified proteins--cytokines and growth factors, antibodies, immunoassays along with biologically active small molecule compounds. The company reports business in three segments - Biotechnology, Diagnostics and Protein Platforms. The company's track record has been impressive so far. Bio-Techne has delivered a positive average earnings surprise of 4.25% in the last four trailing quarters. However, the company's unfavorable Zacks Rank #4 (Sell) and 0.00% ESP makes an earnings beat unlikely this quarter.

Bio-Techne Corp Price and EPS Surprise

Bio-Techne Corp Price and EPS Surprise | Bio-Techne Corp Quote

USANA Health Sciences, Inc.USNA is expected to report fourth-quarter and full-year results on Feb 7. The company develops and manufactures high-quality nutritional supplements, healthy-food and personal care products. The company has a mixed track record over the trailing four quarters, having beaten estimates in the last two quarters and missing the same in the other two with an average earnings surprise of 0.23%. The company currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. Although the rank is favorable, the company's 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 .

USANA Health Sciences, Inc. Price and EPS Surprise

USANA Health Sciences, Inc. Price and EPS Surprise | USANA Health Sciences, Inc. Quote

Stay tuned and check later on our full write-up on earnings releases of these stocks!

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

Eli Lilly and Company (LLY): Free Stock Analysis Report

Johnson & Johnson (JNJ): Free Stock Analysis Report

Bio-Techne Corp (TECH): Free Stock Analysis Report

Gilead Sciences, Inc. (GILD): Free Stock Analysis Report

Celgene Corporation (CELG): Free Stock Analysis Report

Biogen Inc. (BIIB): Free Stock Analysis Report

USANA Health Sciences, Inc. (USNA): Free Stock Analysis Report

AbbVie Inc. (ABBV): Free Stock Analysis Report

Mallinckrodt PLC (MNK): 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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