AbbVie (ABBV) Beats on 2Q Earnings, Revenues, Ups View

AbbVie Inc. ABBV reported second quarter 2016 earnings of $1.26 per share, up 16.7% from the year-ago quarter and surpassing the Zacks Consensus Estimate of $1.20 per share

Revenues increased 17.5% to $6.43 billion in the second quarter of 2016, beating the Zacks Consensus Estimate of $6.24 billion.

The Quarter in Details

Key drug Humira recorded growth of 17.4% with revenues coming in at $4.1 billion. U.S. sales increased 26.7% ($2.7 billion) driven by growth across all three major market categories: rheumatology, dermatology and gastroenterology. Ex-U.S. sales grew 3% to $1.4 billion. Growing awareness, favorable clinical data, additional indications and expansion into new markets should help the product to continue contributing significantly to the top line.

Other products that performed well include Duodopa (up 31.2% to $73 million) and Creon (up 12.9% to $180 million). Meanwhile, products like Synagis and Kaletra (HIV) recorded a decline in revenues.

HCV product Viekira recorded sales of $419 million, slightly above $414 million in the first quarter of 2016. Competition in the HCV market has intensified. AbbVie recorded Imbruvica U.S. sales of $384 million and $55 million of international profit sharing.

Raises 2016 Outlook

AbbVie raised its 2016 EPS outlook to $4.73 – $4.83 per share from the previous range of $4.62 – $4.82 per share. The Zacks Consensus Estimate is currently $4.76 per share.

Our Take

AbbVie’s second quarter results were good with the company surpassing expectations on all fronts. Humira and Imbruvica continued to perform well while Viekira continues to feel the impact of additional competition and the label update.

With several companies working on bringing Humira biosimilars to market, AbbVie has been focusing on diversifying its revenue base and lowering its dependence on the product. AbbVie is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Bristol-Myers Squibb Company BMY, Johnson & Johnson JNJ and Eli Lilly and Company LLY. All three are Zacks Rank #2 (Buy) stocks.

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