Drug Stocks Q4 Earnings Lineup For Mar 1: MYL, KERX & More

With the curtains almost down on the Q4 earnings season, we believe this quarter has turned out to be a good one with growth on track to be the highest in the last two years. As of Feb 17, 2017, 411 S&P 500 members, accounting for 88.4% of the index’s total market capitalization, have reported results, according to the Earnings Preview report.

Total earnings for these 411 index members are up 8% from the year-ago quarter on a 4.9% improvement in revenues. The beat ratio so far is 68.9% for earnings and 54.7% for revenues. We remind investors that Q3 was the first quarter to see earnings growth (up 3.8%) after five consecutive quarters of an earnings decline for the S&P 500 index.

Meanwhile, the positive earnings growth momentum is expected to ramp up in the future quarters. As per our Earnings Preview report, total earnings for the S&P 500 companies will grow 7.4% year over year on 3.9% higher revenues. Please note that estimates for the current period (first quarter 2017) are also looking up.

However, the picture hasn’t been as bright for the pharmaceutical companies so far this season. The soft performance of pharma companies seen this earnings season continued with Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) delivering in-line earnings while missing revenue estimates. Zoetis Inc. (NYSE:ZTS) surpassed bottom-line estimates while revenues came in line with expectations. However, the company narrowed its outlook for 2017 to account for the currency impact.

Meanwhile, Teva Pharmaceutical Industries Ltd.’s (NYSE:TEVA) fourth-quarter earnings and sales were above expectations. Importantly, the generic drug maker reiterated its 2017 guidance despite the recent Copaxone patent loss.

Here we have five pharma companies that are set to report fourth-quarter results on Mar 1. Let's see how things are shaping up for this quarter.

Mylan N.V. (NASDAQ:MYL)

Mylan is scheduled to release earnings after market close. The company’s performance has been mixed so far, having beaten earnings estimates in two of the trailing four quarters and missing in the other two. Overall, it has delivered an average negative surprise of 2.05%. Last quarter, the company recorded a negative earnings surprise of 8.0%.

For this quarter, Mylan has an Earnings ESP of -1.42% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate is pegged at a $1.41 per share.

It has been a dismal 2016 for Mylan and we do not expect the fourth quarter to be any different from this trend. Mylan has been under immense pressure since Aug 2016 when the company faced criticism for the price increase of EpiPen from lawmakers, consumers and the common people alike (Read More: Mylan to Post Q4 Earnings: Will the Stock Disappoint?).

Keryx Biopharmaceuticals, Inc. (NASDAQ:KERX)

Keryx is scheduled to announce results before the opening bell. Last quarter, the company recorded a negative earnings surprise of 77.27%. Keryx’s track record has been disappointing so far. Over the four trailing quarters, the company posted an average negative earnings surprise of 43.03%, reporting in-line earnings only once in the last four quarters, while missing the same on all the other three occasions.

The Zacks Consensus Estimate for the quarter is pegged at a loss of 27 cents.

However, the company has an Earnings ESP of +37.04% and a Zacks Rank #3, indicating a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Apart from license fees, Keryx’s top line comprises revenues generated by its only marketed product, Auryxia (ferric citrate). (Read More: Keryx Q4 Earnings: What's in Store for the Stock?).

Our previous article said that an earnings beat was not likely. However, estimates changed thereafter and we are more confident of an earnings beat now.

Juno Therapeutics Inc. (NASDAQ:JUNO)

Juno is expected to report after market close. The company has had a mixed track record. It posted negative surprises in two of the last four quarters, beat expectations in one and met estimates in one. The average negative earnings surprise in the last four quarters was 9%. Last quarter, the company delivered a positive earnings surprise of 9.38%.

The Zacks Consensus Estimate for the quarter is pegged at a loss of 63 cents.

Our proven model does not conclusively show that Juno is likely to beat earnings estimates this quarter. The company has an Earnings ESP of +20.64% and a Zacks Rank #4,

With no approved products in its portfolio, Juno does not generate any product revenues yet. Hence, investor focus will primarily be on the company’s cash burn and pipeline updates. (Read More: Juno Therapeutics Q4 Earnings: What's in the Cards?)

Geron Corporation (NASDAQ:GERN)

Geron is scheduled to release results after market close. In the last reported quarter, the company recorded a positive earnings surprise of 66.67%. Geron’s performance over the last four quarters has been mixed, with the company surpassing expectations twice and meeting the same twice. The average positive surprise over the last four quarters is 23.81%.

For this quarter, Geron has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate is pegged at a loss of 6 cents.

With no approved product in its portfolio, Geron’s top line solely comprises license fees and royalties. In such a scenario, investor focus will remain on the company’s pipeline. (Read More: Geron Q4 Earnings: What’s in Store for the Stock?).

Intrexon Corporation (NYSE:XON)

Intrexon is scheduled to release results after market close. In the last reported quarter, the company reported in-line earnings. Intrexon’s performance has been mostly disappointing, with the company missing estimates in two of the four trailing quarters with an average negative earnings surprise of 7.72%.

For this quarter, Intrexon has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate is pegged at a loss of 23 cents.

Intrexon’s top line comprises mainly of collaboration and license fees, product revenues and service revenues. (Read More: Intrexon: Will the Stock Pull a Surprise in Q4 Earnings?)

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