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Bristol-Myers Squibb’s Valuation after Its 3Q17 Earnings

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Bristol-Myers Squibb’s Valuation after Its 3Q17 Earnings PART 1 OF 8

Bristol-Myers Squibb’s 3Q17 Performance

Bristol-Myers Squibb’s 3Q17 performance

Bristol-Myers Squibb’s (BMY) product portfolio includes drugs from various therapeutic areas including Cardiovascular, Virology, Immunoscience, Neuroscience, and Oncology.

The chart below shows the revenues of Bristol-Myers Squibb since 4Q15. Because Bristol-Myers Squibb reports more than 45% of its total revenues from outside the US markets, the company is exposed to currency risk.

Bristol-Myers Squibb’s 3Q17 Performance

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Revenues and EPS 

Bristol-Myers Squibb’s (BMY) top line rose ~6.7% to ~$5.3 billion in 3Q17. BMY’s top line was ~$4.9 billion in 3Q16. The growth in revenues included operational growth of ~7.0% in revenues, which was offset by an ~1% negative impact of foreign exchange.

Bristol-Myers Squibb missed Wall Street analysts’ estimates for earnings per share (or EPS). The company reported EPS of $0.75 against analysts’ estimates of $0.77 during 3Q17.

However, the company surpassed analysts’ estimates for revenues and reported revenues of ~$5.3 billion compared to the estimated revenues of ~$5.2 billion during 3Q17.

Segment-wise performance

Bristol-Myers Squibb (BMY) operates in a single segment, but it classifies its drugs into prioritized brands and established brands.

Prioritized brands

BMY’s prioritized drug brands include Opdivo, Eliquis, Orencia, Sprycel, Yervoy, and Empliciti reported revenues of ~$4.0 billion during 3Q17. These revenues represent 26.6% growth compared to revenues of ~$3.2 billion during 3Q16.

Combined, these drugs reported revenue growth during 3Q17 compared to 3Q16. We’ll undertake a detailed performance of these drugs later in this series.

Established brands

Bristol-Myers Squibb’s (BMY) established brands include drugs to treat hepatitis B, hepatitis C, and HIV. These brands reported revenues of ~$1.2 billion during 3Q17, a 29.5% decline compared to revenues of ~$1.8 billion during 3Q16.

The iShares US Pharmaceuticals ETF (IHE) holds 7.0% of its total assets in Bristol-Myers Squibb (BMY). IHE also holds 5.9% in Eli Lilly & Co. (LLY), 2.7% in Mylan (MYL), and 5.7% in Allergan (AGN).

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