3 ETFs To Watch Out For On Biotech Earnings

The earnings season is off to a flying start with almost 75% of the companies having surpassed expectations. The performance has been quite impressive for Biotech companies, with major players beating market estimates. President Donald Trump's failure to implement the healthcare bill was a positive for the biotech space (read: Can Biotech ETFs Continue to Surge Higher?).

This week four major biotech players announced their quarterly results. Amgen Inc AMGN, Gilead Sciences GILD, Biogen Inc BIIB and Alexion Pharmaceuticals ALXN, all beat earnings and revenue estimates (read: Forget Big Tech, Biotech ETFs are Soaring Higher).

Earnings in Focus

Amgen reported second-quarter 2017 adjusted earnings of $3.27 per share on July 25, 2017, beating the Zacks Consensus Estimate of $3.09 and increasing more than 15.1% from $2.84 per share in the year-ago quarter. Moreover, it also beat the consensus estimate on the revenue front. The company reported revenues of $5.810 billion, which surpassed the consensus estimate of $5.666 billion and increased 2.14% from $5.688 billion in the year-ago quarter.

The company updated its full-year non-GAAP EPS guidance to the range of $12.15–$12.65 from $12–$12.6. It also updated its revenue guidance to the range of $22.5–$23 billion from $22.3–$23.1 billion. The company's shares lost around 3.2% at market close on July 26, 2017, after its updated guidance fell short of analyst expectations.

Gilead Sciences reported second-quarter 2017 adjusted earnings of $2.51 per share on July 26, 2017, beating the Zacks Consensus Estimate of $2.11, but decreasing more than 17.1% from $3.03 per share in the year-ago quarter. Moreover, it also beat the consensus estimate on the revenue front. The company reported revenues of $7.141 billion, which surpassed the consensus estimate of $6.359 billion but decreased more than 8.1% from $7.776 billion in the year-ago quarter.

The company updated its full-year revenue guidance to the range of $24–$25.5 billion from $22.5–$24.5 billion. The company's shares gained around 0.95% at market close on July 27, 2017, owing to the EPS and revenue beat.

Biogen Inc reported second-quarter adjusted earnings per share of $5.04 on July 25, 2017, beating the Zacks Consensus Estimate of $4.36 but decreasing more than 3.2% from $5.21 per share in the year-ago quarter. The company reported revenues of $3.078 billion, which surpassed the consensus estimate of $2.812 billion and increased roughly 6.35% from $2.894 billion in the year-ago quarter.

The company updated its full-year non-GAAP EPS guidance to the range of $20.8–$21.4 from $20.45–$21.25. It also increased its revenue guidance to $11.5–$11.8 billion. The company's shares gained more than 3% in pre-market trading due to the better-than-expected results but closed around 1% lower on July 25, 2017.

Alexion Pharmaceuticals Inc reported second -quarter adjusted earnings per share of $1.31 on July 27, 2017, beating the Zacks Consensus Estimate of $1.08 and increasing roughly 40.9% from $0.93 per share in the year-ago quarter. The company reported revenues of $912 million, which surpassed the consensus estimate of $848 million and increased roughly 21.1% from $753 million in the year-ago quarter.

The company updated its full-year non-GAAP EPS guidance to the range of $5.4–$5.55 and increased its revenue guidance to $3.45–$3.525 billion. The company's shares were up around 2.20% at market close on July 27, 2017, primarily due to the better-than-expected results.

We will now discuss a few ETFs with high exposure to the companies discussed.

iShares Nasdaq Biotechnology ETF IBB

This fund seeks to provide exposure to the biotech industry. It has AUM of $9.91 billion and charges a fee of 47 basis points a year. The fund has 8.38% exposure to Biogen, 8.03 to Gilead, 7.96% to Amgen and 4.26% to Alexion (as of July 26, 2017). The fund has returned 10.49% in the last one year and 20.5% year to date (as of July 27, 2017). It currently has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: How Kite Pharma Is Revolutionizing the Fight Against Cancer).

VanEck Vectors Biotech ETF BBH

This fund has AUM of $699.9 million and charges a fee of 35 basis points a year. The fund has 11.22% exposure to Amgen, 10.37% to Gilead, 5.87% to Biogen and 5.44% to Alexion (as of July 27, 2017). The fund has returned 12.35% in the last one year and 20.47% year to date (as of July 27, 2017). It currently has a Zacks ETF Rank #2 with a High risk outlook (read: 5 Reasons Why Biotech ETFs are Soaring).

Ultra Nasdaq Biotechnology ETF BIB

This fund has AUM of $470.81 million and charges a fee of 95 basis points a year. The fund has 8.33% exposure to Biogen, 7.98% to Gilead, 7.91% to Amgen and 4.23% to Alexion (as of July 26, 2017). The fund has returned 15.75% in the last one year and 41.79% year to date (as of July 27, 2017).

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ISHARES NDQ BIO IBB: ETF Research Reports
 
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Alexion Pharmaceuticals, Inc. ALXN: Free Stock Analysis Report
 
Gilead Sciences, Inc. GILD: Free Stock Analysis Report
 
Amgen Inc. AMGN: Free Stock Analysis Report
 
Biogen Inc. BIIB: Free Stock Analysis Report
 
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