Shire earnings tomorrow what to look for

Shire Plc. and AbbVie Inc. last week agreed to terminate what would have been the biggest ever US tax ‘inversion’ deal.

AbbVie pulled support for the $54.5bn deal in the wake of proposed changes to US rules governing the transactions.

With Shire and its investors again left to their own devices, tomorrow’s third-quarter results from the Ireland-based, Jersey –domiciled pharmaceuticals manufacturer will draw enhanced attention.

Shire will receive a beak-fee of $1.64bn as part of the non-completion deal it struck with AbbVie, but investors will want to know about the firm’s organic profitability.

Shire is expected to report on its third quarter at 12 BST, Friday 24th October.

Revenues for the quarter to the end of September are seen at $1.464bn, an 18% rise compared to revenues from Q3 in the year before.

Pre-tax profit is seen leaping 44% to $598.1m, enabling earnings per share (EPS) of $1.633 from 49 cents.

Aside from its earnings, Shire will obviously have quite a bit of explaining to do.

Clearly, the firm’s growth prospects and plans will be the biggest focus for investors.

In the statement announcing the failure of the deal with AbbVie, Shire said it had maintained growth momentum since July “and made material progress across our business.  Whilst we are disappointed that the offer will not now complete, we continue to enjoy excellent prospects as we execute our plan to double Shire’s product sales to $10 billion by 2020.”

Investors will also like to hear a response to the notion that Shire might turn from prey back into hunter, now its takeover is caput, with a potential rekindling of its reported interest in US-based NPS Pharmaceuticals, which is trialling medicines for rare digestive disease which are eligible for potentially lucrative ‘orphan drug’ regulatory status in the US.

For one thing, it will need to announce a replacement form its chief financial officer, James Bowling, who announced this week he will leave in the spring of 2015.