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Pharma ETFs in Focus on String of Earnings Beat - ETF News And Commentary
0 Comments|July 30, 2014

The pharma space has been seeing smooth trading thanks to encouraging industry trends such as development of new drugs, the rising wave of mergers and acquisitions, increased need for medical services, expansion into emerging markets and the Affordable Care Act (often known as Obamacare). Further, strong earnings from pharma players are fueling growth in the sector.

Johnson & Johnson (NYSE: JNJ) was the first major drug company to report second-quarter earnings. It reported earnings and revenues with a huge bang on July 15, spreading optimism into the sector. Another chain of forecast-beating earnings from the industry primes like Pfizer (NYSE: PFE), Merck (NYSE: MRK), Eli Lilly and Company (NYSE: LLY) and Bristol-Myers Squibb Company (NYSE: BMY) is again building up confidence in the sector (read: Healthcare ETFs in Focus on JNJ Earnings).

PFE Earnings in Focus

Earnings per share came in at 58 cents, a couple of cents ahead of the Zacks Consensus Estimate and 4% above the year-ago earnings. Revenues dropped 2% year over year to $12.77 billion but surpassed the Zacks Consensus Estimate of $12.4 billion thanks to growing sales of its cancer medicines.  

For 2014, the U.S. drug maker giant reiterated the earnings per share guidance at $2.20–$2.30 but reduced the revenue guidance to $48.7–$50.7 billion from $49.2–$51.2 billion due to the earlier-than-expected arrival of generic competition for arthritis drug Celebrex in December. The Zacks Consensus Estimates for earnings and revenues are currently $2.25 per share and $50.11 billion, respectively.

Shares of PFE ended the day in the red, losing 1.2% on elevated volume.

MRK Earnings in Focus

The second largest U.S. drug maker reported earnings per share of 85 cents outpacing our estimate by 4 cents and improving 1.2% from the year-ago earnings. Though revenue slipped 1% to $10.9 billion, it is well above the Zacks Consensus Estimate of $10.7 billion. Better-than expected performance was buoyed by strong sales of consumer products and medicines for arthritis and HIV.

Merck projects revenue ...


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