This article first appeared on GuruFocus.
AbbVie (NYSE:ABBV) is starting to regain its footing at a critical moment, with the company lifting its full-year outlook after delivering a first-quarter beat that came in ahead of expectations on both earnings and revenue. Adjusted earnings reached $2.65 a share, topping estimates of $2.60, while revenue rose to $15 billion, also exceeding forecasts. Management now expects 2026 adjusted earnings of as much as $14.28 per share, a 12 cent increase that moves slightly ahead of the average midpoint estimate. The update could matter more than it looks on the surface, particularly as shares had already declined 13% this year through Tuesday's close, suggesting expectations had been under pressure heading into the print.
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The underlying driver appears to be the continued strength of AbbVie's newer growth portfolio, which is increasingly offsetting the decline of Humira. Immunology sales reached $7.29 billion, coming in above expectations of $7.16 billion, with Skyrizi contributing $4.48 billion and Rinvoq adding $2.12 billion. Those gains helped counter a sharp drop in Humira sales to $688 million as competition intensified following the loss of patent protection. Elsewhere, Vraylar generated $905 million in sales, reinforcing the broader portfolio momentum. Management pointed to continued share gains in psoriatic disease and suggested it maintains a wide leadership position across both biologics and oral treatments, although competitive pressure could continue to build following new market entries.
At the same time, the aesthetics business is beginning to show signs of stabilization after a period of weakness. Sales in the segment rose 7.6% to $1.19 billion, with Botox and Juvederm outperforming expectations, potentially indicating that recent marketing efforts are starting to gain traction. This comes despite ongoing headwinds from increased competition and softer discretionary spending trends. However, risks remain in focus, including planned US pricing cuts for medical Botox under Medicare and a recent regulatory setback after the FDA requested additional manufacturing information for a faster-acting Botox formulation, without raising safety or efficacy concerns. For investors, the setup could suggest AbbVie's diversification strategy is progressing, but the durability of that momentum may depend on how effectively it navigates pricing, competition, and regulatory developments.
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