Will BioMarin (BMRN) Disappoint This Earnings Season?
BioMarin Pharmaceutical (BMRN) is scheduled to report third-quarter 2014 results on Oct 23, after the closing bell. Last quarter, the company posted a narrower-than-expected loss due to higher-than-expected revenues. The company has reported a narrower-than-expected loss in three of the last four quarters. Let’s see how things are shaping up for this announcement.
Factors to Consider
We expect BioMarin to report strong revenues in the third quarter driven by its robust product portfolio. Products such as Naglazyme (MPS VI) and Kuvan (phenylketonuria) are expected to perform impressively in the quarter. Sales of Firdapse (Lambert eaton myasthenic syndrome) are expected to remain modest in the third quarter as in previous quarters.
Focus will mainly be on the performance of Vimizim (MPS IVA), the latest entrant into BioMarin’s product portfolio. We expect sales of the drug, which gained U.S. and EU approval in Feb and Apr 2014, respectively, to improve from the $14.3 million recorded in the second quarter.
Operating costs are expected to increase in the third quarter. While research & development costs are expected to increase due to the company’s efforts to develop its pipeline, selling, general and administrative expenses should increase due to costs associated with marketing Vimizim.
We expect BioMarin to provide a detailed update on its pipeline candidates on the earnings call.
Earnings Whispers?
Our proven model does not conclusively show that BioMarin will deliver a positive surprise this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Negative Zacks ESP: BioMarin has an Earnings ESP of -31.82%, since the Most Accurate Estimate stands at a loss of 29 cents, wider than the Zacks Consensus Estimate of a loss of 22 cents.
Zacks Rank: BioMarin holds a Zacks Rank #3 (Hold).
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
Teva Pharmaceutical Industries Ltd. (TEVA) has an earnings ESP of +5.79% and carries a Zacks Rank #2 (Buy). It is scheduled to report third-quarter results on Oct 30.
The earnings ESP for Ligand Pharmaceuticals Inc. (LGND) is +30.00% and it carries a Zacks Rank #2. The company is scheduled to release third-quarter results on Oct 27.
Vertex Pharmaceuticals Inc. (VRTX) has an earnings ESP of +28.07% and carries a Zacks Rank #2. It is expected to report third-quarter results on Oct 28.
Read the Full Research Report on BMRN
Read the Full Research Report on VRTX
Read the Full Research Report on TEVA
Read the Full Research Report on LGND
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