Categories Analysis, Earnings, Health Care

Earnings preview: Botox to drive Allergan’s growth in Q4

Allergan plc (AGN) is set to report its fourth-quarter 2018 earnings results on Tuesday, January 29, before market open. Analysts expect earnings to drop 14% year-over-year to $4.15 per share. Revenue is expected to decrease 8% to $3.9 billion.

The company has consistently reported better-than-expected earnings over the past four quarters and can be expected to do so in the current quarter as well. The topline in the fourth quarter is expected to benefit from the strong performance of leading products such as Botox, Juvederm and Vraylar.

While the demand for Botox is viewed as healthy in general, it is worth noting that the company is making efforts to broaden its customer base for the product by targeting more women in their thirties, who are younger than the usual customers that are over 40 years of age.

Allergan is likely to face increased competition from CGRPs that are being developed by its peers but the company does not see a huge threat to its products. However, the fourth-quarter results are likely to be impacted by product recalls, generic competition and the loss of exclusivity on certain products.

In the third quarter, Allergan reported better-than-expected results, helped by growth in its key brands. On a reported basis, revenues declined 3% due to a loss of exclusivity on some products but on an adjusted basis, revenues grew 5.9%. Adjusted earnings rose 2.4% to $4.25.

Earnings Preview: All eyes on the Pfizer-Glaxo JV

Last quarter, the company raised its outlook for the full year of 2018. Revenue is expected to come in the range of $15.5 billion to $15.7 billion. Adjusted EPS is expected to be $16.20 to $16.60. GAAP loss per share is expected to be $3.36 to $2.95.

The majority of analysts covering Allergan have rated the stock as Buy. Allergan’s peers Pfizer (PFE) and Amgen (AMGN) are also set to report their earnings results on Tuesday. Over the last three months, Allergan’s stock has dropped 11%. The stock was down 1.9% in morning hours on Monday.


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