AbbVie Inc. (ABBV, Financial) released its first-quarter 2017 financial figures on April 25.
The American pharmaceutical company, an Abbott Laboratories (ABT, Financial) spinoff, closed the quarter with non-GAAP EPS of $1.28, an 11.3% increase on a year-over-year basis. The company beat analysts’ expectations by two cents, generating a positive 1.6% surprise.
Source: Yahoo Finance
Analysts forecasted an average EPS of $1.26, ranging between a low of $1.24 and a high of $1.32. The operating income for the quarter was $2.419 billion, a 6.2% increase from $2.278 billion in the comparable quarter of 2016. The net income was $1.711 billion versus net income of $1.354 billion at the end of first-quarter 2016. Non-GAAP net income was $2.06 billion, up 9.9% on a year-over-year basis.
Revenue came in at $6.538 billion, a 9.7% increase on a year-over-year basis. The pharmaceutical company beat expectations by $60 million.
Source: Yahoo Finance
Analysts forecasted AbbVie’s revenue would come in at $6.48 billion on average. The estimates ranged between a low of $6.38 billion and a high of $6.62 billion. For the next quarter, analysts forecast revenue will come in at $6.86 billion. For the year, analysts expect an 8.50% increase to $27.72 billion from $25.56 billion.
Global sales of Humira, the company’s flagship drug, were $4.118 billion, up 15.1% year over year despite its patent protection expiring. Imbruvica, its treatment for marginal zone lymphoma (MZL), generated sales of $551 million, up 44.7% on a year-over-year basis. Viekira Pak, which treats hepatitis C, sales were down 36.3% at $263 million. Sales of Synagis, which is used in the prevention of a serious lung disease in children, were down 5.9% at $300 million. Sales of Lupron, which treats men with prostate cancer and women with endometriosis, were $194 million, up 1.7% on a year-over-year basis. Synthroid, a treatment for hypothyroidism and goitre, generated sales of $192 million, up 5.7% year over year.
AbbVie closed at $66.07 per share Thursday, up $1.03 or 1.58% from the previous trading day, with a volume of 11,692,878 shares traded on the New York Stock Exchange.
The stock has been uptrending since mid-April and has gained 5.5% year to date. It is currently trading with a price-earnings (P/E) ratio of 18.20, a price-book (P/B) ratio of 22.70 and a price-sales (P/S) ratio of 4.11. The forward P/E ratio is 10.26.
When multiplying the forward P/E ratio by the forecasted EPS of $5.50 for 2017, the stock looks slightly overvalued.
Since analysts set an average target price of $71.22 per share, they expect AbbVie has 7.8% upside. The target price ranges between a low of $66.07 and a high of $90.
The recommendation rating is 2.4. The rating ranges between 1.0 (Strong Buy) and 5.0 (Sell). Societe Generale recently upgraded AbbVie from sell to hold. The pharma stock has received three downgrades over the last 12 months, including Leerink Partners (to market perform), Raymond James (to outperform) and Deutsche Bank (to hold).
As of Dec. 31, 2016, AbbVie had approximately $6.42 billion in cash and securities. Total debt amounted to $36.84 billion and net debt was $30.42 billion.
The company also reconfirmed its earnings guidance for 2017. EPS is expected to range between $4.55 and $4.65. Non-GAAP EPS is excepted to range between $5.44 and $5.54.
During the first quarter, Ken Fisher (Trades, Portfolio) reduced his AbbVie stake by 1.96% to 682,915 shares.
Disclosure: I have no positions in AbbVie or Abbott.
Start a free 7-day trial of Premium Membership to GuruFocus.
