AstraZeneca (AZN) to Report Q4 Earnings: What's in the Cards?

AstraZeneca AZN will report fourth-quarter and full-year 2022 results on Feb 9. In the last reported quarter, the company delivered an earnings surprise of 9.09%.The British drugmaker’s performance has been impressive, with earnings beating estimates in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 9.73%, on average.AstraZeneca PLC Price and EPS Surprise AstraZeneca PLC price-eps-surprise | AstraZeneca PLC QuoteAstraZeneca’s stock has risen 12.1% in the past year compared with an increase of 7.7% for the industry. Image Source: Zacks Investment ResearchFactors to ConsiderSales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s top line in the fourth quarter backed by strong demand trends.Our model estimates for Lynparza, Tagrisso and Imfinzi are $677.7 million, $1.48 billion and $805 million, respectively. The Zacks Consensus Estimate for Lynparza, Tagrisso and Imfinzi is $688 million, $1.44 billion and $799, respectively.Please note that AstraZeneca markets Lynparza in partnership with Merck MRK.AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in July 2017.AstraZeneca and Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. Lynparza is also being evaluated in an earlier-line setting for approved cancer indicationsAstraZeneca’s antibody cocktail medicine for COVID-19 Evusheld is likely to have been a key contributor to the top line. However, the sales contribution of the COVID-19 vaccine, Vaxzevria is likely to have been minimum due to the conclusion of many initial contracts. No revenues are expected to have been recorded in the U.S. market like the previous two quarters. Our model estimates Vaxzevria revenues to be $128.7 million while that of Evusheld are expected to be $547.1 million. However, last month, the FDA withdrew the emergency-use authorization for Evusheld for pre-exposure prophylaxis of COVID-19 in certain high-risk populations in the United States. The FDA believes that Evusheld does not neutralize Omicron subvariants that are in circulation presently and are responsible for 90% of COVID cases in the United States. AstraZeneca’s other drugs, Fasenra, Calquence and newer products, the triple combo COPD treatment Breztri and lupus drug, Saphnelo (anifrolumab) are likely to have contributed to sales growth in the soon-to-be-reported quarter. Sales of key respiratory medicine, Symbicort are likely to have been hurt by pricing pressure in Europe and the United States and generic erosion in Japan.The Zacks Consensus Estimate for Fasenra and Calquence is $373 million and $598 million, respectively.Product sales of some drugs like Brilinta/Brilique and Pulmicort in the past few quarters were hurt due to COVID-related disruptions and pricing pressure from the volume-based procurement (VBP) program in China. The trend is likely to have continued in the fourth quarter.The Zacks Consensus Estimate for Symbicort and Pulmicort is $632 million and $142 million, respectively.Sales of AstraZeneca’s major legacy drugs have been declining due to rising generic competition. The trend is likely to have continued in the fourth quarter.Sales of AstraZeneca’s Rare Disease drugs like Ultomiris and Strensiq, which were added following the Alexion acquisition, are also expected to have been higher and contributed to the top line.Overall, sales in China are likely to have been hurt due to pricing pressure associated with the National Reimbursement Drug List and VBP programs. Collaboration revenues might have been an important contributor to the top line. The Zacks Consensus Estimate for collaboration revenues is $369 million.AstraZeneca expects higher operating costs, particularly SG&A in the fourth quarter. R&D expenses are expected to be in the low 20s percentage of total revenues.Earnings WhispersOur proven model does not conclusively predict an earnings beat for AstraZeneca this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.Earnings ESP: AstraZeneca’s Earnings ESP is -5.81% as the Zacks Consensus Estimate of 71 cents is higher than the Most Accurate Estimate of 67 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: AstraZeneca has a Zacks Rank #3.Stocks to ConsiderHere are some drug/biotech stocks that have the right combination of elements to beat on earnings this time around:Bayer BAYRY has an Earnings ESP of +6.70% and a Zacks Rank #3. You can the complete list of today’s Zacks #1 Rank stocks here.Bayer’s stock has risen 2.9% in the past year. Bayer beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. Bayer has a four-quarter earnings surprise of 18.23%, on average. BAYRY is scheduled to release its fourth-quarter 2022 results on Feb 28.Alkermes ALKS has an Earnings ESP of +115.4% and a Zacks Rank#2.Alkermes’ stock has risen 15.1% in the past year. ALKS beat earnings expectations in each of the trailing four quarters, the average surprise being 306.73%.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Free Report: Must-See Hydrogen StocksHydrogen fuel cells are already used to provide efficient, ultra-clean energy to buses, ships and even hospitals. This technology is on the verge of a massive breakthrough, one that could make hydrogen a major source of America's power. It could even totally revolutionize the EV industry.Zacks has released a special report revealing the 4 stocks experts believe will deliver the biggest gains.Download Cashing In on Cleaner Energy today, absolutely free.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AstraZeneca PLC (AZN): Free Stock Analysis Report Merck & Co., Inc. (MRK): Free Stock Analysis Report Alkermes plc (ALKS): Free Stock Analysis Report Bayer Aktiengesellschaft (BAYRY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research
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