Biogen Idec Inc. (BIIB) is scheduled to report its second-quarter 2014 results before the opening bell on Jul 23. Last quarter, the company posted a negative earnings surprise of 5.04%. However, the company had recorded positive earnings surprises in four successive quarters before that. The four-quarter trailing average beat is 8.74%. Let’s see how things are shaping up for this announcement.
Factors at Play
Biogen holds a strong position in the multiple sclerosis (MS) market. The company’s oral MS treatment Tecfidera should continue performing well. Tecfidera sales should benefit from EU approval earlier this year. Tysabri and Avonex should also aid revenues.
Earnings Whispers?
Our proven model does not conclusively show that Biogen 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 Biogen is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.80 per share.
Zacks Rank: Biogen carries a Zacks Rank #1 (Strong 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.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements:
Endo International (ENDP) has an earnings ESP of +4.49% and carries a Zacks Rank #2. It is scheduled to report its second-quarter results on Jul 31.
Hospira Inc. (HSP) has an earnings ESP of +1.79% and carries a Zacks Rank #2. It is expected to report its second-quarter results on Jul 30.
The earnings ESP for Celgene Corporation (CELG) is +2.60% and it carries a Zacks Rank #2. The company is scheduled to release its second-quarter results on Jul 24.
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