Drugmakers will report earnings for the first quarter of 2020 in the midst of a worldwide pandemic that has markets reeling, and analysts expect revenue to be down almost across the board for the largest pharmaceutical and biotech companies.
Despite falling revenue, experts believe the biopharma industry will be relatively resilient to negative market forces than other areas of the healthcare industry due to strong fundamentals and a mostly intact supply chain.
Of the largest drugmakers by market capitalization, only Bristol-Myers Squibb Co. and Germany's Bayer AG are expected to see revenues rise from fourth-quarter 2019 levels, according to consensus operating estimates. However, many companies can expect revenues to be higher than in the first quarter of 2019.
EPS is also expected to rise for many of the top pharmaceutical companies despite the global market crisis, according to analysts.
The first of the big drugmakers to report earnings April 14 is Johnson & Johnson, which is also the largest by market capitalization. Cowen analyst Joshua Jennings said in an April 9 note that the company is likely to report a decline in sales in its medical devices business, although its pharmaceutical and consumer units should perform better.
Although Jennings tempered previous growth assumptions, he said J&J is better insulated from the impact of COVID-19 — the respiratory disease caused by the novel coronavirus — than its peers in the space. Still, the company is not immune, he said.