What Happened?
Shares of pharmaceutical company AbbVie (NYSE: ABBV) fell 3.9% in the afternoon session after the company reported third-quarter results that were overshadowed by a steep drop in profitability and a reduced earnings forecast for the full year. Although AbbVie's quarterly revenue of $15.78 billion and adjusted earnings per share (EPS) of $1.86 both surpassed Wall Street's estimates, investors focused on underlying weaknesses. The company's operating margin fell sharply to 12.1% from 26.5% a year ago, signaling rising costs were eroding profits. More significantly, AbbVie lowered its full-year adjusted EPS guidance to a midpoint of $10.63. This downward revision suggested to investors that the company's profitability challenges would persist, outweighing the positive top- and bottom-line beats for the quarter.
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What Is The Market Telling Us
AbbVie’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 30 days ago when the stock gained 5.2% on the news that the company submitted a biologics license application (BLA) to the U.S. Food and Drug Administration (FDA) for its drug candidate pivekimab sunirine. The company is developing the molecule as a potential treatment for blastic plasmacytoid dendritic cell neoplasm (BPDCN), a rare and highly aggressive blood cancer, as well as acute myeloid leukemia (AML). Investor optimism was further bolstered by AbbVie's announcement of a $70 million expansion of its Bioresearch Center in Massachusetts to increase its U.S. biologics manufacturing and R&D capabilities. This move is part of a larger investment to strengthen domestic operations, potentially shielding the company from pharmaceutical tariffs. The positive news, which followed the stock reaching an all-time high on the previous day, appeared to outweigh a downgrade from HSBC to 'Hold' from 'Buy'.
AbbVie is up 21.1% since the beginning of the year, but at $217.24 per share, it is still trading 11.1% below its 52-week high of $244.38 from September 2025. Investors who bought $1,000 worth of AbbVie’s shares 5 years ago would now be looking at an investment worth $2,462.
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