Rocketing higher in the premarket session, notching fresh all-time highs, shares of biopharma giant AbbVie (ABBV 118.08, +9.78 +9.03%) trade about % higher as investors applaud a blowout FY18 earnings outlook and Q4 beat.
Investors are looking fondly on the guidance and announced capital investment plan, which as a result of the impact of the recently announce tax reform, came in ahead of Street expectations. For FY18 then, ABBV sees earnings per share of $7.33-7.43, representing growth of 32% at the midpoint and reflecting both stronger operating performance and the aforementioned impact from tax reform. The guidance reflects an effective tax rate of about 9% in 2018, and is a raised amount from the previous expectation of FY18 EPS between $6.37-6.57 – issued Oct. 27. On the revenue side for 2018, ABBV expects FY18 to approach $32 billion.
As an aside, ABBV guided on the conference call for Q1 EPS of $1.77-1.79.
ABBV also commented further on tax, stating that it will experience a one-time net tax benefit in 2018 related to the timing of the phase in of provisions of the new legislation on certain subsidiaries. Additionally, ABBV anticipates the adjusted effective tax rate to increase to 13% over the next five years as a result of the increased domestic income and investment.
Also, ABBV announced this morning the planned investment of about $2.5 billion during the next five years in capital projects in the U.S. Further, the company also is currently evaluating additional expansion of its U.S. facilities, and, in 2018, the company plans to make a one-time charitable contribution of about $350 million to select not-for-profit organizations based in the United States. The company also plans to accelerate pension funding by $750 million, as well as enhance non-executive employee compensation.
The company’s Q4 results were also quite impressive. Namely, ABBV reported Q4 EPS of $1.48 on revenue growth of 13.9% to about $7.74 billion aided by strong HUMIRA sales.
In that vein, Global HUMIRA sales were up 14.0% this quarter on a reported basis. In the U.S., HUMIRA sales were up 15.1% with international sales up 6.5%, excluding a 5.2% favorable impact from foreign exchange.
Q4 global IMBRUVICA net revenues were $708 million, with U.S. sales of $585 million and international profit sharing of $123 million for the quarter, reflecting growth of 38.7%.
In all, ABBV stock is enjoying another strong session – after topping all-time highs yesterday ahead of the report. Perhaps the Street was expecting an earnings bump, but the size of the move may have taken some aback initially. Shares hold up decently into the afternoon in the face of a generally higher broader market – S&P +0.5%, Dow +0.3%, Nasdaq +0.6%.