Beaten-Down Pharma ETFs To Buy Post Q3 Results

Total earnings for 76.7% of the total healthcare market capitalization are up 11% on revenue growth of 7.2%. The growth rates seem unimpressive when compared with some of the other sectors. Earnings and revenue beat ratios of 82.9% and 57.1%, respectively, are also not great either.

Among the most notable players, Johnson & Johnson (JNJ – Free Report) was the first major drug company to report earnings on Oct 16, followed by Bristol-Myers Squibb Company (BMY – Free Report) and Merck (MRK – Free Report) on Oct 25. Other major U.S. drug company — Pfizer (PFE – Free Report) — reported Oct 30. These industry bigwigs came up with solid results either beating on earnings or revenue estimates or both.

Earnings in Focus

Johnson and Johnson

The world’s biggest maker of healthcare products continued its long streak of earnings beat. Earnings per share came in at $2.05, couple of cents ahead of the Zacks Consensus Estimate and 7.9% higher than the year-ago quarter. Revenues grew 3.6% year over year to $20.35 billion and edged past the Zacks Consensus Estimate of $19.92 billion. However, Johnson & Johnson raised its revenue guidance to $81-$81.4 billion from $80.5-$81.3 billion for 2018 and earnings per guidance range to $8.13-$8.18 from $8.07-$8.17.

Pfizer

Earnings per share of 78 cents came in couple of cents above the Zacks Consensus Estimate and revenues of $13.3 billion were in line with the estimate. On an annual basis, earnings per share and revenues rose 16% and 1%, respectively. For 2018, the U.S. drug giant narrowed the revenue guidance range from $53-$55 billion to $53-$53.7 billion, and earnings per share guidance from $2.95-$3.05 to $2.98-$3.02.

Merck

Earnings per share came in at $1.19, surpassing the Zacks Consensus Estimate of $1.16 and improving 7.2% from the year-ago quarter. Revenues inched up 5% year over year to $10.79 billion but missed the estimate of $10.87 billion. Merck raised its earnings guidance from $4.22-$4.30 to $4.30-$4.36 but slightly narrowed its revenue expectations from $42.0-$42.8 billion to $42.1-$42.7 billion.