Jazz Pharmaceuticals (JAZZ) reports fourth-quarter loss, misses revenue estimates

Jazz Pharmaceuticals (JAZZ) reported quarterly loss of $0.07 per share versus the Zacks Consensus Estimate of $0.51. For comparison, earnings per share were $4.21 a year earlier. These numbers have been adjusted for one-off items.

This quarterly report represents an earnings surprise of -113.73%. A quarter ago, it was expected that this drugmaker would post earnings of $4.72 per share when the actual figure was $5.17, representing a surprise of 9.53%.

The company has topped consensus earnings per share estimates twice over the last four quarters.

Jazz, which belongs to the Zacks Medical – Drugs industry, posted revenues of $972.12 million for the quarter ended December 2022, missing the Zacks Consensus Estimate by 0.06%. This compares to the prior-year revenues of $896.73 million. The company has topped the consensus revenue estimate two times over the last four quarters.

The sustainability of the immediate share price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Shares of the jazz company have lost about 11.9% since the beginning of the year, while the S&P 500 has gained 3.4%.

What’s next for jazz?

While Jazz has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors address this issue is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of the earnings release, the estimate revision trend for the Jazz is mixed. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates into a Zacks Rank of #3 (Hold). Therefore, the company’s stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $4.33 on $891.1 million in revenue for the coming quarter and $18.39 on $3.81 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry may also have a significant impact on share prices. In terms of the Zacks Industry Rank, the Medical – Drugs industry is currently in the top 43% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Bioventus (BVS), another company in the same industry, has not yet released results for the quarter ending December 2022.

The company is expected to post quarterly earnings per share of $0.04 in its upcoming report, which would represent a year-over-year change of -84.6%. The consensus EPS estimate for the quarter has been revised 157.1% down to the current level over the last 30 days.

Bioventus’ revenues are expected to be $134.09 million, an increase of 2.8% compared to the prior-year quarter.

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