Drug, Biotech Stocks' Q3 Earnings Due on Oct 31: AMGN, PFE, INCY
The third-quarter earnings season is up and running for the drug and biotech sector. Several large drug and biotech stocks have already announced third-quarter results so far. A few industry players like Novartis NVS, Merck, AbbVie and Bristol-Myers beat on both earnings and sales, while others like Sanofi and Roche reported mixed results.
The pharma/biotech industry falls under the broader Medical sector, comprising pharma/biotech and generic companies, and medical device companies.
Per the Earnings Trends report dated Oct 25, 15% of the Medical sector participants, constituting 33.2% of the sector’s market capitalization, have already posted earnings. While 88.9% of the companies beat on earnings, 77.8% surpassed on revenues. Earnings increased 7% year over year, while revenues rose 6.8%.
Overall, third-quarter earnings of the Medical sector are expected to decline 20.9%, while sales are projected to increase 5.4%.
Let's see how things have shaped up for Pfizer Inc. PFE, Amgen Inc. AMGN and Incyte Corporation INCY in the third quarter. These companies will release earnings on Oct 31.
Pfizer
Pfizer’s performance has been strong, with the company exceeding earnings expectations in each of the last four quarters. The company delivered a four-quarter earnings surprise of 18.60% on average. In the last reported quarter, PFE beat earnings expectations by 19.64%.
Pfizer has an Earnings ESP of -163.66%. The Zacks Consensus Estimate is pegged at a loss of 7 cents per share, and the Most Accurate Estimate stands at a loss of 19 cents per share.
Our proven model does not conclusively predict an earnings beat for Pfizer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PFE has a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pfizer’s revenues are expected to have decreased in the third quarter of 2023 due to steep expected declines in revenues from its COVID-19 vaccine, Comirnaty partnered with BioNTech and lower product revenues from its oral antiviral pill for COVID, Paxlovid.
Earlier this month, Pfizer slashed its previously issued revenue guidance for 2023 due to lower-than-expected demand for Comirnaty and Paxlovid.
Nonetheless, Pfizer expects better non-COVID operational revenue growth in the third quarter, driven by its key products new launches and newly acquired products like Nurtec and Oxbryta.
Pfizer Inc. Price and EPS Surprise
Pfizer Inc. price-eps-surprise | Pfizer Inc. Quote
Amgen
This large biotech’s performance has been strong, with earnings beating estimates in all the trailing four quarters. The company delivered a four-quarter earnings surprise of 5.90%, on average. In the last reported quarter, AMGN delivered an earnings surprise of 12.61%.
Amgen’s Earnings ESP is -0.03% and it carries a Zacks Rank #3.
Our proven model previously predicted an earnings beat for Amgen in the to-be-reported quarter. However, estimates changed after that and an earnings beat looks difficult now.
Amgen’s product sales in the third quarter are expected to have been driven by strong volume growth of products like Evenity, Repatha and Prolia, among others.
However, lower revenues from oncology biosimilars (Kanjinti and Mvasi) and legacy established products and lower COVID-19 antibody revenues are expected to have hurt the top line.
Amgen Inc. Price and EPS Surprise
Amgen Inc. price-eps-surprise | Amgen Inc. Quote
Incyte
INCY’s earnings beat estimates in two of the trailing four quarters and missed the same in the other two, delivering an average negative surprise of 13.57%. In the last reported quarter, Incyte came up with a positive earnings surprise of 13.79%.
Incyte currently has an Earnings ESP of -6.92% as the Most Accurate Estimate of $1 per share is lower than the Zacks Consensus Estimate of $1.07. INCY has a Zacks Rank #3.
Higher sales of lead drug, Jakafi, a first-in-class JAK1/JAK2 inhibitor in all approved indications, is likely to have boosted revenues in the third quarter. Also, incremental sales from newly approved drugs like Opzelura and Zynyz are expected to have boosted sales in the third quarter.
Meanwhile, Incyte earns product royalty revenues from Novartis for the commercialization of Jakafi in ex-U.S. markets. Strong Jakavi sales recorded by Novartis are likely to have boosted Incyte’s royalty revenues in the third quarter.
Incyte Corporation Price and EPS Surprise
Incyte Corporation price-eps-surprise | Incyte Corporation Quote
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Novartis AG (NVS) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
Incyte Corporation (INCY) : Free Stock Analysis Report
