Stockwatch: Managing Down Earnings Expectations
This article was originally published in Scrip
The first-quarter 2016 earnings season for life science companies is about to get underway and if the previous week's early quarterly earnings reports from US banks were anything to go by, expectations are not high. Indeed, even the normally optimistic investment bank analysts have been prefacing the upcoming earnings season at many companies with a good dose of caution.
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Investors in pharmaceutical companies appreciate details such as sales force dynamics, price-volume relationships and channel-stocking effects. Their absence can make investors wary.
Pandemic-related clinic closures and safety issues forced Novartis to trim its guidance slightly. But Roche, faced with more severe pandemic and biosimilar pressures, left January’s guidance unchanged.
With something for everyone in Johnson & Johnson’s second-quarter earnings report, a nudge upwards for full-year guidance could not disguise the jump down from January’s pre-pandemic expectations.