Is AbbVie a Buy After Its Latest Earnings Report?
Behind a doubling in adjusted EPS sits a more modest picture -- and a dividend streak worth understanding.
AbbVie (ABBV) posted strong third-quarter earnings, with revenue up 10.3% to $17.4 billion and adjusted earnings per share (EPS) of $3.82, beating management guidance. The drop in patent protection for Humira, once the world's best-selling drug, was offset by impressive growth from Skyrizi and Rinvoq, which now drive much of the company's revenue.
Skyrizi revenue increased 22.7% to $5.78 billion, while Rinvoq sales rose 23.9% to $2.71 billion. These two immunology drugs accounted for nearly $8.5 billion in revenue, or 48.7% of AbbVie's total. Despite Humira revenue falling to $683 million, AbbVie raised its full-year adjusted EPS guidance to the range of $13.95 to $13.99, a less than 1% increase from the previous range.
The company also increased its quarterly dividend by 5.2% to $1.82 per share, bringing the annual payout to $7.28 per share, or about 52% of the adjusted EPS forecast. With a forward P/E ratio of around 21, AbbVie's valuation may leave less room for disappointment, but its commitment to increasing dividends and successful transition from Humira to new drugs makes it an attractive option for investors seeking long-term growth and income.
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