Key Points
It posted a second-quarter earnings report that raised some concerns.
One was a miss on the consensus bottom-line estimate.
High-flying pharmaceutical company AbbVie (NYSE: ABBV) has seen its stock rise in many recent sessions. Yet Friday's wasn't one of them, as the company's shares took a nearly 3% loss on the back of a second-quarter earnings report that investors found uninspiring.
Another double-digit quarter
AbbVie unveiled that quarter's figures before market open. Its revenue came in at just under $17 billion for the period, which was more than 10% higher year over year. It also managed to boost its net income not under generally accepted accounting principles (non-GAAP, or adjusted) by 23% to almost $6.5 billion, or $3.65 per share.
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But investors aren't impressed by robust growth rates alone; they like to see their stocks beat expectations, too. Unfortunately, despite the improvement, AbbVie's adjusted profitability was under the $3.71 average analyst estimates. On a brighter note, it topped the consensus revenue projection of $16.77 billion.
AbbVie is a company with many approved goods on the market. Its largest product category, immunology, delivered a 15% increase in global revenue to $8.79 billion, led by the sturdy blockbuster Skyrizi. Neuroscience did better in terms of growth, with a 20% rise to $3.2 billion. On the other hand, oncology dipped by nearly 2% to $1.65 billion.
Mistreated by the miss
That bottom-line miss wasn't drastic, and AbbVie posted growth where it matters. However, investors can be unforgiving when a company cuts its guidance, and this was a deciding factor in the Friday sell-off.
Given the major impact of AbbVie's big-ticket acquisition of Apogee Therapeutics, it modified its profitability outlook. It now expects to earn $13.87 to $14.07 per share for the entirety of 2026, down from the previous range of $13.91 to $14.11. That sits below the consensus analyst estimate of $14.12.
I've been an AbbVie bull for a while, as I think it's got one of the best portfolios in the U.S. pharmaceutical space. I don't think investors should be spooked by a slight earnings miss or a modest guidance cut made for justifiable reasons. I still think this stock is a buy.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie. The Motley Fool has a disclosure policy.