AbbVie Faces Headwinds in Q4 but Remains Confident in Long-Term Strategy

In its recent earnings report, AbbVie recorded a Q4 earnings result of $2.79 per share, excluding non-recurring items, falling slightly below analyst estimates of $2.80 by $0.01. The company's revenues also declined by 5.4% year-over-year, reaching $14.3 billion, compared to the $14.02 billion estimates. AbbVie issued guidance for FY24 with a projected EPS of $11.05-11.25, excluding non-recurring items, which is below the consensus estimate of $11.26.

The lowered guidance includes a $0.32 per share dilutive impact related to the proposed acquisitions of ImmunoGen and Cerevel Therapeutics, expected to close in mid-2024. The company's adjusted diluted EPS guidance for 2024 excludes any impact from acquired IPR&D and milestones, which are unreliable to forecast.

AbbVie's 2023 financial results were affected by the significant impact of Humira biosimilar competition, leading to a 9.6% decrease in full-year net revenues for its immunology portfolio. The oncology portfolio also experienced a 10.1% decrease in full-year net revenues. Despite these challenges, the company witnessed growth in its neuroscience and aesthetics portfolios, with the neuroscience portfolio increasing by 18.2% and the aesthetics portfolio growing by 0.9% on an operational basis.

AbbVie's full-year revenues decreased by 6.4% to $54.318 billion, while diluted EPS dropped by 59.0% on a GAAP basis to $2.72. The adjusted diluted EPS also fell by 19.3% to $11.11. The earnings report highlights the company's strategic investment in research and development (R&D), which accounted for 13.4% of net revenues in 2023. This investment is aimed at bolstering its pipeline and preparing for future growth.

AbbVie's chairman and CEO, Richard A. Gonzalez, stated that 2023 was a successful year marked by strong operational execution and significant overperformance from its non-Humira growth platform. The company's confidence in its long-term strategy is evident in its reaffirmed expectation of a high single-digit compound annual revenue growth rate through 2029 and raised sales outlook for Skyrizi, Rinvoq, Ubrelvy, and Qulipta.

ABBV shares are higher by about 1% in midday Friday in reaction to the premarket earnings release.

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