Please ensure Javascript is enabled for purposes of website accessibility

How Will AbbVie's Earnings Fare?

By Dan Caplinger - Apr 24, 2013 at 5:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The newly independent pharma company gives its report on Friday.

On Friday, AbbVie (ABBV -0.47%) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

AbbVie has just completed its first quarter as an independent publicly traded company, having left Abbott Labs (ABT -0.27%) with the company's generic drugs, diagnostics, nutrition, and medical-device segments. Now that AbbVie can focus solely on pharma, will it find ways to face its huge coming patent cliff? Let's take an early look at what's been happening with AbbVie over the past quarter and what we're likely to see in its quarterly report.

Stats on AbbVie

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$4.29 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: S&P Capital IQ. *Based on pro forma figures provided by Abbott.

How will AbbVie do on its own this quarter?
In recent months, analysts have had mixed views on AbbVie's earnings prospects, having reduced their estimates for the just-ended quarter by $0.03 per share but raising their full-year 2013 earnings-per-share. The stock has chosen the more optimistic course, soaring more than 25% since mid-January.

After its spinoff, the reliance that AbbVie has on its best-selling Humira has become more obvious than ever. The arthritis drug made up more than half of AbbVie's total revenue last year, and although Humira won't lose patent protection until 2016, investors are still nervous about how the company will replace the $9.27 billion in annual sales that Humira brought in 2012.

Yet AbbVie does face competitive threats in its core markets. Pfizer (PFE 0.50%) won approval for its Xeljanz JAK inhibitor late last year, and although doctors are more familiar and comfortable with Humira, the fact that Xeljanz is taken orally could be a big draw over self-injection. Meanwhile, AbbVie's No. 2 drug, AndroGel, is under siege from Perrigo (PRGO 0.16%), which got approval from the Food and Drug Administration for a bioequivalent of the lesser-concentrated form of the drug back in February.

To address those concerns, AbbVie does have a promising pipeline of drug candidates in development. A couple of arthritis treatments have shown great promise, including one that could become one of the safest drugs on the market. Yet it will take a big success story to replace Humira's place atop AbbVie's sales results, and until the company's pipeline gets closer to the FDA approval stage, it'll be tough to assess the potential impact new drugs will have on revenue.

In AbbVie's earnings report, watch closely for more color on its recently released results in trials testing a potential new hepatitis C treatment. Although there's heavy competition in that lucrative market, success there could give AbbVie the opening it needs to improve its long-term sales prospects.

Click here to add AbbVie to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AbbVie Inc. Stock Quote
AbbVie Inc.
$151.72 (-0.47%) $0.71
Pfizer Inc. Stock Quote
Pfizer Inc.
$50.65 (0.50%) $0.25
Abbott Laboratories Stock Quote
Abbott Laboratories
$112.44 (-0.27%) $0.30
Perrigo Company plc Stock Quote
Perrigo Company plc
$37.58 (0.16%) $0.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.