AbbVie’s (ABBV) second-quarter earnings report overall presented a positive picture of revenue growth and business diversification, but a slight earnings per share miss and a downward revision to full-year guidance triggered a short-term market pullback. A stable dividend growth record and reasonable valuation levels continue to make it an attractive long-term investment among large-cap pharmaceutical companies.
On Friday, shares of pharmaceutical giant AbbVie fell nearly 3% after the company released its second-quarter earnings report, to which investors reacted tepidly.
The results showed that AbbVie’s second-quarter revenue approached $17 billion, increasing by more than 10% year over year. On a non-GAAP basis, adjusted net income rose 23% to nearly $6.5 billion, or $3.65 per share. While revenue slightly exceeded the consensus estimate of $16.77 billion, adjusted earnings per share fell short of the analysts’ average expectation of $3.71.
By business segment, performance among AbbVie’s multiple marketed products was mixed. The largest immunology product category posted global revenue growth of 15%, reaching $8.79 billion, with the core product Skyrizi delivering solid performance. The neuroscience segment grew even more strongly, with revenue of $3.2 billion, up 20% year over year. However, oncology business revenue declined nearly 2% to $1.65 billion.
Investors were able to tolerate the slight earnings miss, but the company simultaneously lowered its full-year profit guidance, which became the decisive factor behind Friday’s sell-off. Affected by the acquisition of Apogee Therapeutics, AbbVie adjusted its earnings outlook and now expects full-year 2026 earnings per share of $13.87 to $14.07, down from the previous forecast of $13.91 to $14.11, and also below the consensus analyst estimate of $14.12.
AbbVie is one of the largest pharmaceutical companies in the world and is generally viewed as a blue-chip dividend stock rather than a high-growth name. However, over the past five years, the stock has accumulated a gain of 125%, and with dividends reinvested, the total return reached 170%. The company has raised its dividend for 53 consecutive years (including its history as part of Abbott Laboratories (ABT) prior to 2013), making it a member of the “Dividend King” club—a group of companies that have increased payouts annually for at least half a century. Based on forward price-to-earnings ratio, AbbVie currently trades at approximately 18 times, and its valuation remains attractive.
Looking ahead, analysts expect that between 2025 and 2028, AbbVie’s revenue and adjusted earnings per share will post compound annual growth rates of 9% and 21%, respectively. Growth drivers will include stabilization in Humira’s year-over-year performance, surging sales of Skyrizi and Rinvoq, and the growing importance of ImmunoGen’s antibody-drug conjugates and Cerevel’s neuroscience assets. Skyrizi and Rinvoq have already been approved for inflammatory bowel disease, plaque psoriasis, and other dermatological indications, with more indications expected to be added in the coming years. The company projects that combined sales of these two drugs will exceed $31 billion by 2027, equivalent to roughly 43% of expected revenue for that year. Patent protection for these two drugs extends into the 2030s, providing AbbVie with ample cash and time to develop and acquire additional blockbuster drugs. At the same time, the company will continue to expand its oncology and neuroscience product portfolios to reduce its dependence on the immunology market.
