1/30/2015 0 Comments
Abbvie ABBV reported a very messy Q4 report. There are many GAAP to non-GAAP adjustments for the Shire breakup fee and restructuring costs included in cogs, r&d and sg&a. If you make all these adjustments, the numbers don't look too bad. Reported revenue of $5.452B includes a one-time royalty payment 0f $81M resulting from a lawsuit settlement. Adjusted revenue of $5.371B was just within the consensus area of $5.37B - $5.42B. Cost also have to be adjust for several items. After all this, margins appear to have expanded. I don't see anything here that would change the long-term growth expectations for EPS to grow at 15%. The stock looks attractive at 16x forward eps. Conference call starting now. 2015 GAAP EPS guidance of $3.91 - $4.11 imply more margin expansion off of revenue consensus estimate of $23.3B.
Michael Grove, CFA