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Bristol Myers’ Upbeat Q2 Earnings Fail to Impress Investors

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Investors are disappointed as Bristol Myers Squibb has lowered its total net sales guidance for 2022 amid stiff competition from generic drugs. However, the company continues to see strength in its in-line products and new product portfolio.

Bristol Myers Squibb (NYSE: BMY) has reported encouraging second-quarter 2022 earnings results. However, shares of the company declined nearly 1.8% in Wednesday’s pre-market trade. The fall in stock price could be due to a slight downward revision in the company’s sales guidance amid rising competition from generic drugs.

The global pharmaceutical company has reported earnings of $1.93 per share, up 18.4% year-over-year. The metric easily surpassed the consensus estimate of $1.77 per share.

Total revenues of $11.89 billion rose around 2% year-over-year and were up 5% excluding foreign exchange impacts. Further, the metric has surpassed the Street estimate of $11.43 billion.

The upside in the revenues was supported by strength in the in-line products (primarily Eliquis and Opdivo) and the solid performance of the company’s new product portfolio (Abecma, Opdualag, and Reblozyl).

Geographically, the company’s U.S. revenues saw a 12% year-over-year rise to $8.3 billion in the second quarter. Meanwhile, international revenues slipped 16% to $3.6 billion in the reported quarter (down 8% excluding foreign exchange impacts). Sluggish demand for Revlimid, due to rising competition from generic drugs, has hurt the company’s global revenues.

BMY’s revenues from in-line products rose 9% year-over-year to $8.66 billion in the reported quarter. Within the segment, revenues from the company’s blood thinner drug, Eliquis, were up 16% from the year-ago period to $3.24 billion. Revenues from the immune-oncology drug, Opdivo, rose 8% year-over-year to $2.06 billion.

Meanwhile, revenues of the company’s popular drug Revlimid fell 22% year-over-year to $2.50 billion.

Further, the gross margin declined 150 basis points from the same quarter last year to 78.3%. The metric majorly received support from product mix, which was partly offset by forex impacts and related hedging settlements.

BMY Updates Outlook for 2022

For 2022, Bristol Myers Squibb expects adjusted earnings in the range of $7.44-$7.74 per share on slightly downwardly revised total net sales of $46 billion. The company had earlier anticipated revenues of $46.4 billion for 2022. Meanwhile, analysts expect the company to post earnings of $7.46 per share and revenues of $46.24 billion in 2022.

Street Is Cautiously Optimistic about BMY Stock

As per TipRanks, the Street is cautiously optimistic about BMY stock and has a Moderate Buy consensus rating based on eight Buys, three Holds, and two Sells. BMY’s average price forecast of $78.17 implies 6.2% upside potential. Shares of the company have grown 21.8% so far this year.

TipRanks data shows that financial bloggers are 94% Bullish on BMY, compared to the sector average of 72%.

Key Takeaways for BMY Stakeholders

Bristol Myers Squibb has been consistently witnessing strong performance from the in-line product range, solid momentum across the new product portfolio, and continued pipeline progress. However, tough competition from generic drugs and adverse foreign exchange impacts remain headwinds for the stock.

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