Why AbbVie (ABBV) Stock Is Higher This Morning

NEW YORK (TheStreet) -- Shares of AbbVie Inc.  (ABBV) are up 2.66% to $50.63 after the research-based pharmaceuticals company reported its 2014 first quarter financial results.

The company's first quarter adjusted EPS was 71 cents, up 4.4%, and higher than the previous guidance range of 67 cents to 69 cents. GAAP EPS was 61 cents.

First quarter revenue was $4.563 billion, a 5.4% increase over the 2013 first quarter, and up 6.7% on an operational basis.

Revenue growth reflected a 17.5% global reported sales growth from Humira, and double digit growth from other of its main products.

AbbVie confirmed its 2014 adjusted EPS guidance range of $3.00 to $3.10. The GAAP EPPS range is $2.63 to $2.73.

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TheStreet Ratings team rates ABBVIE INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ABBVIE INC (ABBV) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Pharmaceuticals industry and the overall market, ABBVIE INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has improved to $1,245.00 million from having none in the same quarter last year. Since the company had no net operating cash flow for the prior period, we cannot calculate a percent change in order to compare its growth rate with that of its industry average.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • The debt-to-equity ratio is very high at 3.28 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, ABBV has managed to keep a strong quick ratio of 2.14, which demonstrates the ability to cover short-term cash needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 26.7% when compared to the same quarter one year ago, falling from $1,539.64 million to $1,128.00 million.
  • You can view the full analysis from the report here: ABBV Ratings Report
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