5 Drug Stocks Reporting Q2 Earnings On Aug 8: AGN & More

As the Q2 earnings cycle draws to a close, the overall picture that has emerged does not appear as grim as we feared. As per our Earnings Trend report, approximately 414 S&P 500 members (accounting for 85.2% of the index’s market capitalization) have reported quarterly results so far, wherein earnings have declined 4.5% on 1.0% lower revenues. Despite bleak year-over-year comparisons, a whopping 70.3% beat on bottom-line estimates while 51.9% were able to top revenue expectations.

The second quarter is still on track to be the fifth quarter in a row to record negative earnings growth and estimates for the third quarter are still moving south, although the magnitude of the fall has declined considerably. In fact, the fourth quarter is predicted to see a return to growth, which will continue into 2017. This could be reason enough for investor optimism for now.

How did the Medical Sector Perform?

Medical is one of the few sectors that were poised to record positive earnings growth this quarter, braving a challenging business environment fraught with headwinds like unfavorable currency movements and biosimilars. Based on the quarterly results of 84.6% members that have released quarterly earnings as of yet, the sector has clearly exceeded expectations. Average earnings in the sector recorded 6.3% growth on 9.8% higher revenues, resulting in a blended beat of 77.3%. Bigwigs like Johnson & Johnson (NYSE:JNJ) and Novartis AG (NYSE:NVS) were able to beat expectations comfortably while many upped their annual outlooks in anticipation of a year-over-year better second half.

Quite a few companies are slated to report results next week. Let’s take a look at five companies in the Medical sector, all of which are scheduled to make earnings announcements on Aug 8.

Allergan plc (NYSE:AGN) is scheduled to report second-quarter 2016 results before the opening bell on Aug 8. Both of Allergan’s top and bottom line should continue to be driven by its acquisition of Botox-maker Allergan Inc (NYSE:AGN_pa). and other such strategic deals. The company has an impressive track record so far, having beaten estimates in three of the four trailing quarters and meeting the same once, bringing the positive earnings surprise to 2.90%. However, Allergan’s current Zacks Rank #3 (Hold) and an Earnings ESP of -1.49% makes surprise difficult for this quarter (Read more: Allergan Q2 Earnings: Will the Stock Disappoint?)

Endo International plc (NASDAQ:ENDP) is scheduled to report second-quarter 2016 on Aug 8. While the company’s strategy of divesting its underperforming assets was encouraging, its 2016 outlook was quite a disappointment. Nevertheless, the company has an impressive track record of having beaten expectations in all of the last four quarters with an average earnings beat of 4.5%. However, Endo’s current Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% makes surprise difficult for this quarter (Read more:Will Endo Surprise This Earnings Season again?)

Kite Pharma, Inc. (NASDAQ:KITE) is scheduled to report second-quarter 2016 results on Aug 8, after the market closes. This clinical-stage biopharmaceutical company focused primarily on the development and commercialization of immune-oncology drugs that harness the power of a patient’s own immune system to target and kill cancer cells. Kite’s performance over the last four quarters has been mixed with the company surpassing expectations twice and lagging the same twice. Overall, the company posted an average earnings surprise of +4.80% over the past four quarters. However, Kite’s current Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% makes surprise difficult for this quarter (Read more: Kite Q2 Earnings: What's in Store for the Stock?)

Horizon Pharma plc (NASDAQ:HZNP) is scheduled to report second-quarter 2016 results on Aug 8, before the opening bell. The biopharmaceutical company markets nine drugs through its orphan, primary care and rheumatology business units. The company’s growth-by-acquisition strategy to expand and diversify its portfolio is quite encouraging. However, Horizon Pharma’s performance has been dismal so far, with the company missing earnings estimates twice in the trailing four quarters and surpassing once. Nevertheless, the company has maintained an average positive earnings surprise of 4.46%. Horizon Pharma currently carries a Zacks Rank #3, which when combined with a 0.00% Earnings ESP makes surprise prediction difficult (Read more: Can Horizon Surprise Earnings Estimates in Q2?)

Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is scheduled to report second-quarter results on Aug 8. This clinical-stage biopharmaceutical company focuses on drugs for the treatment of rare and ultra-rare diseases, specifically serious, debilitating genetic diseases. The company’s performance has been dismal so far, having missed earnings estimates in all of the past four quarters, bringing the average negative earnings surprise to 21.90%. For the second quarter, the company currently carries a Zacks Rank #3, which when combined with its ESP of -2.04%, makes earnings beat unlikely.