AbbVie Inc. (ABBV - Free Report) reported mixed results in the third quarter of 2017. The company surpassed earnings estimates, while posted in-line revenues during the period. Importantly, the company raised its long-term sales expectations of its blockbuster rheumatoid arthritis drug Humira, despite rising competition in the market. In response, shares nudged up almost 2% in pre-market trading.

In the year so far, AbbVie’s shares have surged 48.6%, significantly outperforming the industry’s 16.1% rally.

The biopharmaceutical company reported third-quarter 2017 earnings of $1.41 per share, beating the Zacks Consensus Estimate of $1.39 by 1.4%. The bottom line grew 16.5% year over year.

The company posted revenues of $7 billion in the reported quarter, having met the Zacks Consensus Estimate. Revenues also increased 9.5% year over year. Excluding a 0.7% favorable impact from foreign exchange rate fluctuations, operational revenues climbed 8.8%.

Quarter in Detail

Key drug Humira recorded sales growth of 14.8%, on an operational basis, with revenues coming in at $4.7 billion. Sales in the United States rallied 19.1% to $3.2 billion. Humira sales in the ex-U.S. market were up 6.8% on operational basis and 9.7% on reported basis to $1.55 billion. Growth across all three major market categories drove the upside, despite increasing competition from new classes of drugs as well as an indirect biosimilar competition in international markets.

Third-quarter net revenue from Imbruvica stood at $688 million, up 37.3% year over year. U.S. sales of Imbruvica were $574 million, up 31% compared with the year-ago figure. AbbVie recorded $114 million of international profit sharing with Johnson & Johnson (JNJ - Free Report) .

Other products that delivered an impressive performance include Duodopa, showing revenue growth of 22% on operational and 26.3% on reported basis. Another product called Creon witnessed an increase of 14.8% in revenues on both operational and reported basis.

HCV (chronic hepatitis C virus) product recorded sales of $276 million, down 27.7% and 26.8% on operational and reported basis, respectively. The downside can be attributable to intense pricing and competitive pressure in the HCV market.

Adjusted SG&A expenses were up 5.8% to $1.45 billion, while R&D expenses escalated 13.3% to $1.19 billion in the quarter. Adjusted operating margin was 43.1% of sales in the reported quarter.

AbbVie announced an 11% hike in quarterly dividend to 71 cents per share from 64 cents per share. The increased payment will begin with the dividend payable in February next year.

2017 Outlook

AbbVie raised its adjusted earnings for 2017 in the range of $5.53-$5.55 compared with $5.44-$5.54, expected previously. The earnings guidance reflects year-over-year growth of 14.9% at the mid-point. The Zacks Consensus Estimate is currently pegged at $5.53 per share.

Long-Term Guidance

AbbVie projects adjusted EPS in the range of $6.37-$6.57 for 2018, showing an approximate 15-19% rally from the mid-point of the revised range of 2017 outlook.

AbbVie estimates Humira to generate global sales of $21 billion in 2020, higher than $18 billion, predicted previously in 2015.

Several companies are working on biosimilar versions of Humira. Though Amgen’s (AMGN - Free Report) Humira biosimilar received an FDA approval in September 2016, its launch is delayed to 2023 due to settlement of its patent dispute with AbbVie. This will make Humira free from competition for a few more years. Also, AbbVie has a robust intellectual property, which is expected to generate positive sentiments among the investors.

Zacks Rank & Key Picks

AbbVie currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Eli Lilly and Company (LLY - Free Report) , carrying a Zacks Rank #2 (Buy).

Eli Lilly’s earnings per share estimates increased from $4.15 to $4.19 for 2017 and from $4.57 to $4.61 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters with an average beat of 1.68%.