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Weak Sector Earnings Dragging Pharmaceutical ETFs Down

May 07, 2018

From Zacks: Total earnings for 83.1% of the total healthcare market capitalization are up 14.7% on revenue growth of 8.1%. The growth rates seem unimpressive when compared with some of the other sectors. Earnings and revenue beat ratios of 88.9% and 75%, respectively, are also not great either. Among the most notable players, Johnson & Johnson (JNJ – Free Report) was the first major drug company to report earnings on Apr 17, followed by Eli Lilly and Company (LLY – Free Report) and Bristol-Myers Squibb Company (BMY – Free Report) on Apr 24 and Apr 26, respectively. Other major U.S. drug companies — Merck (MRK – Free Report) and Pfizer (PFE – Free Report) — reported on May 1. These industry bigwigs came up with earnings or revenue beat or both. The world’s biggest maker of healthcare products continued its long streak of earnings beat. Earnings per share came in at $2.06, 5 cents ahead of the Zacks Consensus Estimate and 12.6% higher than the year-ago quarter. Revenues grew 12.9% year over year to $20.01 billion and edged past the estimated $19.4 billion. Johnson & Johnson raised its revenue guidance from $80.60-$81.40 billion to $81.0-$81.8 billion but maintained its earnings per share outlook of $8.00-$8.20, which reflects growth of 6.8%-9.6% (read: Healthcare ETFs in Focus After Johnson & Johnson Q1 Earnings).