Morgan Stanley recently released a research update on AbbVie's (ABBV.US) Q2 2025 earnings report, showing that the company's Q2 2025 revenue and EPS both exceeded expectations. Revenue reached $15.423 billion (up 7% year-over-year), EPS was $2.97 (up 12% year-over-year), and the company raised its 2025 EPS guidance by 2%. Skyrizi and Rinvoq performance exceeded consensus expectations, while Humira and Juvederm underperformed expectations. The firm expects the stock price to rise and maintains an "Overweight" rating.

AbbVie's earnings report showed that the company will raise its 2025 earnings per share guidance to $11.88-12.08, up from the previous $11.67-11.87. The midpoint is $11.98, representing a 2% increase from the previous $11.77, consistent with consensus expectations of $11.95, but 4% below the firm's estimate of $12.45. The firm stated that its estimates have been adjusted for third-quarter R&D expenses. It remains unclear whether consensus expectations have fully incorporated this factor.

Data shows that AbbVie's Q2 revenue was $15.4 billion, 3% above consensus expectations of $15.0 billion and in line with the firm's expectation of $15.4 billion. Operating profit was $6.8 billion, 4% above consensus expectations of $6.6 billion but 2% below the firm's expectation of $7.0 billion. Earnings per share was $2.97, 3% above consensus expectations of $2.88 but 1% below the firm's expectation of $3.00.

Second-quarter global immunology product total sales were $7.63 billion, exceeding both Morgan Stanley and consensus expectations. Skyrizi global sales were $4.4 billion versus consensus expectations of $4.1 billion, Rinvoq global sales were $2.0 billion, in line with consensus expectations, but Humira U.S. sales were $802 million, below consensus expectations of $1.0 billion.

For background, the previous Q2 2025 guidance was for revenue of approximately $15.0 billion, with foreign exchange expected to have a 0.3% adverse impact on sales growth, while Morgan Stanley and consensus expectations were $15.4 billion/$15.0 billion respectively. Adjusted earnings per share was $2.84-2.88, including a -$0.42 R&D expense impact, with a midpoint of $2.86, while Morgan Stanley and consensus expectations were $3.00/$2.88 respectively. It remains unclear to what extent consensus expectations have incorporated the R&D expense impact.

Compared to the firm's model, there is a $0.03 downside risk in earnings per share, with the following composition: revenue -$0.01, cost of goods sold growth $0.00, selling and administrative expenses growth $0.04, R&D expenses -$0.09, other growth $0.03, taxes $0.01, share count growth $0.00.

Second-quarter year-over-year growth: revenue up 7%, gross profit up 6%, operating profit up 11%, pre-tax profit up 9%, net profit up 12%, earnings per share up 12%.

Additionally, Morgan Stanley provided specific details on various drug products' revenue performance that exceeded or fell short of expectations:

The following drugs exceeded revenue expectations: - Skyrizi: $4.423 billion, exceeding expectations of $4.334 billion by $589 million, up 2% - Rinvoq: $2.028 billion, exceeding expectations of $1.979 billion by $490 million, up 2% - Botulinum toxin treatment: $928 million, exceeding expectations of $887 million by $41 million, up 5% - Vraylar: $900 million, exceeding expectations of $820 million by $80 million, up 10% - Ubrelvy (acute indication): $338 million, exceeding expectations of $268 million by $70 million, up 26% - Linzess: $258 million, exceeding expectations of $200 million by $58 million, up 29% - Qulipta (atogepant, prevention indication): $267 million, exceeding expectations of $226 million by $41 million, up 18% - Mavyret: $375 million, exceeding expectations of $334 million by $41 million, up 12% - Venclexta: $691 million, exceeding expectations of $670 million by $21 million, up 3% - Creon: $404 million, exceeding expectations of $372 million by $32 million, up 9%

The following drugs fell short of revenue expectations: - Imbruvica: $754 million, $22 million below expectations of $776 million, down 3% - Humira: $1.180 billion, $329 million below expectations of $1.509 billion, down 22% - Duodopa: $97 million, $18 million below expectations of $115 million, down 16% - Botox Cosmetics: $692 million, $3 million below expectations of $695 million - Juvederm (including fillers and line extensions): $260 million, $38 million below expectations of $298 million, down 13% - Lumigan 0.03%/0.01%: $103 million, $7 million below expectations of $110 million, down 6% - Vyalev: $68 million, $6 million below expectations of $74 million, down 8% - Other products: $1.498 billion, $110 million below expectations of $1.608 billion, down 7%