AbbVie Inc. ABBV reported impressive results in the fourth quarter of 2017. The company surpassed earnings and revenue estimates during the period. Importantly, it raised its earnings expectations for 2018. In response, shares climbed almost 6% in pre-market trading.
AbbVie’s shares have soared 90.1% in a year’s time, significantly outperforming the industry’s 26.5% rally.
The biopharmaceutical company reported fourth-quarter 2017 earnings of $1.48 per share, beating the Zacks Consensus Estimate by 2.8%. The bottom line grew 23.3% year over year. Earnings also surpassed the previous expectations of $1.42 and $1.44.
The company posted revenues of $7.7 billion in the reported quarter, marginally beating the Zacks Consensus Estimate of $7.6 billion. The top line also increased 13.9% year over year. Excluding a 1.5% favorable impact from foreign exchange rate fluctuations, operational revenues jumped 12.6%. Revenues reported higher growth compared with the previously expected 10% rise on an operational basis.
Quarter in Detail
Key drug Humira recorded sales growth of 12.3% on an operational basis with revenues coming in at $4.9 billion. Sales in the United States increased 15.1% to $3.3 billion. Humira sales in the ex-U.S. market were up 6.5% on operational basis and 11.7% on reported basis to $1.57 billion. Growth across all three major market categories drove this upside despite increasing competition from new classes of drugs as well as an indirect biosimilar competition in the international markets.
Fourth-quarter net revenues from Imbruvica stood at $708 million, up 38.7% year over year. U.S. sales of Imbruvica were $585 million, up 35.3% compared with the year-ago figure. AbbVie recorded $123 million (up 38.7%) of international profit sharing with Johnson & Johnson JNJ.
Other products having delivered an impressive performance include Duodopa showing revenue growth of 21.3% on operational and 27.6% on reported basis. Another product called Creon witnessed an ascent of 10.6% in revenues on both operational and reported basis.
HCV (chronic hepatitis C virus) product recorded sales of $510 million, significantly up 62.7% and 63.4% on operational and reported basis, respectively.
Adjusted SG&A expenses inched up 0.9% to $1.64 billion and R&D expenses escalated 12.5% to $1.32 billion in the quarter. Adjusted operating margin was 40.7% of sales in the reported quarter.
2017 Results
Full-year sales jumped 10.1% year over year to $28.2 billion. Sales outpaced the Zacks Consensus Estimate of $28 billion. Revenue growth is slightly higher than previous expectation of 10%.
The 2017 earnings of $5.60 per share exceeded the Zacks Consensus Estimate of $5.56. The full-year bottom line reflects 16.2% growth compared with the year-ago figure. Moreover, reported earnings are slightly higher than the past projection of $5.53-$5.55.
2018 Outlook
AbbVie raised its adjusted EPS in the range of $7.33-$7.43 for 2018 compared with $6.37-$6.57, predicted earlier. The earnings guidance reflects a year-over-year surge of 32% at the mid-point. The Zacks Consensus Estimate for current-year earnings is pegged at $6.58 per share.
AbbVie Inc. Price, Consensus and EPS Surprise
AbbVie Inc. Price, Consensus and EPS Surprise | AbbVie Inc. Quote
Zacks Rank & Key Picks
AbbVie carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the health care sector are Novo Nordisk A/S NVO and Sucampo Pharmaceuticals, Inc. SCMP, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Novo Nordisk’s earnings per share estimates have increased from $2.51 to $2.56 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters with an average beat of 4.46%. The company’s share price has surged 65.7% in a year.
Sucampo’s earnings per share estimates have moved north from $1.15 to $1.19 for 2018 in the last 60 days. The company pulled off a positive earnings surprise in three of the last four quarters with an average beat of 15.63%. The company’s share price has soared 63.7% in a year.
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