Key Predictions For Q3 Earnings Reports Of PBYI, XON, LGND

The third-quarter reporting cycle is drawing to a close. Quarterly results have been strong. Overall, the beat percentage is in line with the recent quarters but growth rates have been particularly impressive. Also, the estimate revision trend for Q4 has been mostly favorable.

As of Nov 3, 2017, 406 S&P 500 members, accounting for 85.4% of the index’s total market capitalization, have reported results, according to the Earnings Preview.

Total earnings of these 406 index members are up 7.5% from the year-ago quarter on 6.3% improvement in revenues. The beat ratio is 73.9% for earnings and 66.7% for revenues.

Per the report, total earnings of S&P 500 companies in Q3 are expected to grow 6.5% year over year on 5.6% higher revenues.

Please note that the broader Medical sector (includes drug, biotech as well as Medical Device companies) is expected to record year-over-year growth of 4.6% in revenues and 6.5% in earnings in Q3.

Among the big biotech/pharma companies that reported this week, generic maker Mylan (NASDAQ:MYL) missed estimates for both earnings and sales in Q3 due to lower EpiPen sales. Among the ones that reported last week, Pfizer (NYSE:PFE) and Allergan (NYSE:AGN) beat earnings expectations while revenues came in line. Zoetis (NYSE:ZTS) beat expectations for both earnings and sales. While Pfizer and Zoetis raised their earnings guidance, Allergan increased only the upper end of its earnings outlook.

Here we have three small biotech/pharma companies that are set to report third-quarter results on Nov 9. Let's see how things are shaping up for this quarter.

Puma Biotechnology, Inc. (NASDAQ:PBYI)

Puma Biotech, which is scheduled to release earnings after market close, delivered a positive surprise of 34.29% last quarter. The company’s earnings track record has been good so far. It has delivered an average positive surprise of 39.46% in the last four quarters.

For this quarter, Puma has an Earnings ESP of +18.47% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at a loss of $2.75 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Puma Biotechnology’s only marketed product, Nerlynx (neratinib) was launched for the treatment of HER2-positive breast cancer in August. So Q3 is the first quarter in which Puma will record sales for Nerlynx. (Read More: Puma Q3 Earnings: Will it Surpass Estimates Again?)

Intrexon Corporation (NYSE:XON)

Intrexon is also scheduled to announce results after market close. Last quarter, the company delivered a positive earnings surprise of 23.81%. In the trailing four quarters, it missed expectations twice, surpassed estimates once while meeting the same in the other, resulting in an average negative surprise of 0.57%.

The company has an Earnings ESP of -13.64% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate is pegged at a loss of 22 cents per share.

Investor focus is expected to be on Intrexon’s pipeline on the conference call. The company is developing several candidates in partnership with other companies. (Read More: What's in Store for Intrexon This Earnings Season?)

Ligand Pharmaceuticals Inc. (NASDAQ:LGND)

Ligand is expected to report after market close. Ligand’s earnings history has been a mixed bag with the company surpassing estimates in two of the last four quarters and missing the same in the other two. It also delivered a trailing four-quarter average positive surprise of 6.19%. Last quarter, the company came up with a positive earnings surprise of 67.50%.

The company has an Earnings ESP of -15% and a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for earnings is pegged at 60 cents per share.

We expect investor focus to remain on the company’s updates regarding partnerships and major pipeline assets on the third-quarter conference call. (Read More: What's in Store for Ligand This Earnings Season?)

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