Yahoo Finance’s Emily McCormick joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss recent earnings reports from Verizon, Abbott and Biogen.
Video Transcript
ALEXIS CHRISTOFOROUS: Yahoo Finance’s Emily McCormick is joining us now with more on those earnings reports. Emily, lots to get to here, but let’s start with our parent company, Verizon. Third quarter earnings there topping estimates on both the top and bottom line. And I understand Verizon giving some good guidance as well.
EMILY MCCORMICK: That’s right, Alexis, the company did give good guidance here, with customers still turning to the carrier for wireless service during the pandemic. And that’s both on the broadband side and on the wireless side. We saw here on the guidance aspect, Verizon now saying it expects total wireless service revenue growth of at least 2% in the fourth quarter of 2020 compared to last year. It also raised its full year adjusted earnings per share guidance to a range of flat to up 2% versus down to up 2% that had previously been expected.
Now taking a look at these fiscal third quarter results, we did see third quarter operating revenue of $31 and 1/2 billion, slightly below the $31.6 billion expected. That was down 4% over last year, partially due to the timing of new product launches. Now if we take a look at the bottom line though, we did see those adjusted earnings per share of $1.25, better than the $1.22 that had been expected. And that even included a $0.05 per share impact due to COVID-19, and impacts related to delays in bill payments and other things related to the virus.
Now in terms of those wireless postpaid net additions, those were up 553,000 during the quarter, well above the 475,000 that had been expected to be added. Though we did see postpaid phone net additions specifically a bit light at 283,000 versus about 318,000 anticipated. Now in terms of broadband, we did see Verizon’s Fios home internet service bringing on 139,000 new customers, well above the 27,000 consensus. Alexis.
ALEXIS CHRISTOFOROUS: All right, I want to switch gears and go into the health sector for a moment, take a look at Abbot Labs earnings. This is a company that is working on a COVID-19 rapid test. And I understand their earnings also coming in better than expected.
EMILY MCCORMICK: Absolutely. And really here seeing these results driven by sales of those coronavirus tests, especially the rapid tests that the company just received emergency use authorization for back in August. Remember that the government is now spending $750 million to buy 150 million of these tests. And we saw in this unit specifically, COVID-19 tests alone brought in $881 million.
That helped propel the diagnostics unit for the company up 39% for sales in the quarter to $2.6 billion. And we did see overall sales up 10% to nearly $9 billion on that overall top line. Company also raising its profit guidance for the year. Again, those COVID-19 tests, as well as medical device sales, we should also note, were a strong point in this report for Abbott. Alexis and Brian.
ALEXIS CHRISTOFOROUS: All right, let’s stick with the biotech sector there and talk Biogen. I see that the stock is taking a hit right now, earnings tumbling 55% in the latest quarter.
EMILY MCCORMICK: Absolutely. So taking a look here at Biogen, we did see this company come under pressure from some generic competition now That was especially for its multiple sclerosis treatment, Tecfidera. Now this treatment alone posted third quarter sales of $9.53 million. That was down 15% over last year, and below the $1 billion that analysts had been expecting.
Now important to note that Mylan, a competitor, began selling a generic form of that drug back in August, and others have also come into the market. So Biogen actually said in its guidance that it, quote, “assumed significant erosion of Tecfidera in the fourth quarter.” Now taking a look at what this company guided toward, it now expects revenue to come in at as much as $13.4 billion. It’s a big step down from the as much as $14.2 billion that the company guided toward before. So again, this guidance here really spooking investors. We do see those shares down nearly 1% in premarket trading. Alexis.
