Pharma ETFs Set To Benefit Post Strong Q3 Earnings

Total earnings of the 79.7% of the entire healthcare market capitalization that has reported so far are up 7.1% on revenue growth of 8.2%. The earnings and revenue growth rates seem to be the fourth highest among all the sectors. Earnings and revenue beat ratios of 80.6% and 86.1%, respectively also appear strong.

Most industry bigwigs delivered encouraging results, either beating on earnings or revenues or both and also raised revenue or earnings guidance or both. Let’s delve into a few of them:

Earnings in Focus

Johnson and Johnson

The world's biggest healthcare products maker continued its long streak of earnings beat. It also outpaced revenue estimates. Earnings per share came in at $2.12, 12 cents ahead of the Zacks Consensus Estimate and 3.4% higher than the year-ago quarter. Revenues grew 1.9% year over year to $20.7 billion and edged past the Zacks Consensus Estimate of $20.1 billion. For 2019, Johnson & Johnson raised its sales forecast to $81.8-$82.3 billion from $80.8-$81.6 billion, which represents 0.2%-0.7% year-over-year growth, on robust demand for its cancer drugs. It also upped its earnings per share guidance to $8.62-$8.67 from $8.53-$8.63, representing year-over-year growth of 5.4-6%.

Pfizer

Earnings per share of 75 cents were 12 cents above the Zacks Consensus Estimate and revenues of $12.68 billion also edged past the consensus mark of $12.15 billion. On a year-over-year basis, earnings per share and revenues declined 2% and 5%, respectively. For 2019, the U.S. drug giant revised sales guidance to $51.2-$52.2 billion from $50.5-$52.5 billion and earnings per share to $2.94-$3.00 from $2.76-$2.86.

Merck

Earnings per share of $1.51 surpassed the Zacks Consensus Estimate of $1.25 and also improved 27% from the year-ago quarter. Moreover, revenues grew 15% year over year to $12.4 billion, edging past the consensus mark of $11.7 billion. Merck increased its revenue projection from $45.2-$46.2 billion to $46.5-$47 billion for this year and earnings per share view from $4.84-$4.94 to $5.12-$5.17.

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