Bristol Myers Squibb
Only two more portfolio names are reporting quarterly earnings this week.
Bristol-Myers
Bristol-Myers Squibb (BMY) will report Thursday before the opening bell. You can read our analysis of the previous quarter here. It was a great quarter last time around with key drugs Revlimid and Eliquis both topping analyst expectations. We've seen resilient results so far from our two other major pharmaceutical names (Johnson & Johnson (JNJ) and AbbVie (ABBV) ), and we would be surprised if Bristol-Myers did not follow suit because Covid-19 should have had a limited impact on its portfolio.
In addition to the results, we are interested in hearing more about the pipeline and upcoming readouts. More specifically, we'll look for more commentary about ozanimod, a drug that came over from the Celgene acquisition that the FDA approved for patients with multiple sclerosis back in late March. We have high hopes on that one.
At the time this was written, first-quarter consensus estimates per FactSet were for sales of $10 billion and earnings per share of $1.49.
ViacomCBS
ViacomCBS (VIAC) will also report Thursday before the opening bell. You can read our analysis of the previous quarter here. Last quarter was the first release of the combined CBS and Viacom, and it was an absolute disaster to say the least. There was a top and bottom-line miss and guidance was very light, especially in free cash flow, which is one of the most important metrics for this company.
For the upcoming quarter, it is hard to expect anything good considering live sports were cancelled (hurt most by the loss of March Madness) and movie theaters closed near the end of the quarter. And guidance should be worse considering these headwinds persisted through the second quarter to date. Yes, the stock is incredibly cheap, but it is hard to expect the multiple to improve unless we see management execute better and forward estimates stabilize, not be revised lower and lower as they have been for quite some time.
As for some questions we have in the quarter, we want to hear how quickly management can resume its exploration of non-core asset divestitures (such as the BlackRock building and Simon & Schuster) to improve the balance sheet. Additionally, we hope management lays out a faster plan with its DTC initiative, the only tool the company has that can offset secular declines in the traditional TV market. And with several content providers expected to go through a dry spell of new releases in the back half of the year into 2021 (due to production halts related to Covid-19), will ViacomCBS take advantage of the moment and heavily monetize its vast library to the other players?
At the time this was written, first-quarter consensus estimates per FactSet were for sales of $6 billion and earnings per share of $0.93.
Action Alerts PLUS, which Cramer manages as a charitable trust, is long BMY, JNJ, ABBV and VIAC.