AbbVie projects double-digit annual earnings growth through 2020
AbbVie Inc (ABBV.N) reported higher quarterly sales and net income on Friday and forecast double-digit growth of earnings per share through 2020, putting the drugmaker in line to beat Wall Street’s current expectations.
AbbVie, which was spun out of Abbott Laboratories in 2013, expects revenue of $37 billion in 2020, which is $5 billion more than the current Wall Street consensus, according to Chief Executive Officer Richard Gonzalez.
Speaking on a conference call with reporters, he said the company projects a 10 percent compound annual growth rate over the next five years – driven by sales of arthritis drug Humira, which are seen topping $18 billion by 2020.
For the third quarter, AbbVie posted net income of $1.24 billion, or 74 cents per share, on sales of $5.94 billion, compared with 31 cents per share and $5.02 billion, respectively, a year earlier. Wall Street analysts, on average, expected sales of $5.89 billion in the latest quarter.
Excluding one-time items, AbbVie said it earned $1.13 a share.
Worldwide sales of Humira rose 12 percent to $3.65 billion, but sales outside of the United States fell 9 percent, due in part to foreign exchange rates. Sales of hepatitis C treatment Viekira Pak totaled $469 billion, which fell short of the average Wall Street estimate of $506 million, as compiled by Evercore ISI.
U.S. health regulators last week issued a warning of potential risk of serious liver injury for certain patients using Viekira Pak, but Gonzalez said the warning applies to just 3 to 4 percent of patients and “we don’t believe it will have a material impact on overall performance.”
The CEO said AbbVie also expects to continue to widen its profit margins. The drugmaker, which achieved an adjusted operating margin of 44.9 percent in the third quarter, forecast a 2020 operating margin of over 50 percent.
For full-year 2015, AbbVie said it expects adjusted earnings per share of $4.26 to $4.28. Looking ahead, AbbVie forecast full-year 2016 adjusted earnings of $4.90 to $5.10 per share. Analysts, on average, have forecast 2016 earnings of $4.95 per share, according to Thomson Reuters I/B/E/S.
AbbVie also raised its dividend by 12 percent, effective in February.
(Reporting by Deena Beasley; Editing by Leslie Adler)