Drug Stocks' Q3 Earnings To Watch On Nov 14: ARGS, AST

With 89% of the S&P 500 members having already reported their results, the Q3 reporting cycle is soon to wrap up. Though earnings and revenue growth for the reported index members is still low, an improvement over other recent periods is palpable. In fact, it is being said that the earnings recession has come to an end in Q3.

This is corroborated by the Q3 performance of the index members. Of the 445 S&P 500 companies that have reported as of Nov 9, 72.8% topped earnings expectations while 55.3% surpassed revenue estimates. Total earnings for these index members were up 4% from the year-ago quarter on a 2.7% improvement in revenues.

This is on track to be the first quarter to see positive earnings growth after five quarters of back-to-back declines.

Several sectors are witnessing earnings and revenue growth this quarter and Medical is one of them. Our Q3 scorecard shows that 88.7% of the companies in the Medical sector have reported results so far, with earnings growing 6.4% on 7.4% higher revenues. The blended beat, which represents the percentage of companies that have beaten both earnings and revenue estimates, stands at 42.6%.

The earnings picture for both the pharma and the biotech sectors is a mixed bag of beats and misses. Pharma giants such as Johnson & Johnson (NYSE:JNJ) , Merck (NYSE:MRK) & Co., Inc., and Bristol-Myers Squibb Company (NYSE:BMY) surpassed both earnings and revenue expectations, and raised their outlook for the year. Meanwhile, Allergan (NYSE:AGN) plc and Pfizer Inc. (NYSE:PFE) lagged on both the fronts and trimmed their 2016 earnings guidance.

Meanwhile, in the biotech sector, Celgene Corporation (NASDAQ:CELG) and Amgen Inc. (NASDAQ:AMGN) topped earnings and revenue estimates, and raised their expectations for 2016, whereas sector behemoth Gilead Sciences Inc. (NASDAQ:GILD) missed on earnings and barely surpassed revenue estimates, keeping its outlook unchanged for the year.

Several mid- and small-sized pharma and biotech companies are yet to report Q3 results. Let’s take a sneak peek at two such companies, both of which are scheduled to report Q3 results on Nov 14.

Headquartered in Durham, NC, Argos Therapeutics Inc. (NASDAQ:ARGS) is an immuno-oncology company focused on the development and commercialization of immunotherapies using the Arcelis technology platform. The most advanced candidate in the company’s pipeline, AGS-003, is being evaluated for the treatment of metastatic renal cell carcinoma and non-small cell lung cancer.

ARGOS THERAPEUT Price and EPS Surprise

Argos’ track record has been far from encouraging with the company missing estimates in three of the trailing four quarters, bringing the average negative surprise to 5.66%. This Zacks Rank #3 (Hold) stock has an Earnings ESP of 0.00% for the third quarter, making it difficult to predict a positive surprise.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Asterias Biotherapeutics, Inc. (NYSE:AST) is developing proprietary cell therapy programs based on its immunotherapy and pluripotent stem cell platform technologies. Currently, the company is focused on the advancement of its three pipeline candidates — AST-OPC1, AST-VAC1 and AST-VAC2 — across neurology and oncology.

ASTERIAS BIOTHR Price and EPS Surprise

This Fremont, CA-based biotechnology company has a dismal track record. The company has missed expectations in three of the trailing four quarters with an average negative surprise of 30.64%. This Zacks Rank #3 stock has an ESP of 0.00%, once again making a surprise prediction difficult this quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Confidential from Zacks

This week, Zacks researchers have named 7 other stocks that look to break out even sooner than today's Bull of the Day. You can see these time-sensitive tickers free, and access additional trades that are not available to the public. Simply click here>>