Several of our companies reported earnings this week, and we have a few positions to manage ahead of expiration.

AbbVie (ABBV): 150.50

AbbVie announced Q1 results on Thursday, reporting $2.46 per share on $12.2 billion in revenue. While revenue was in line with estimates, it was down nearly 10% year over year, and EPS missed by a few cents.

Sales of Skyrizi and Rinvoq — the two drugs whose sales were supposed to help replace the giant revenue producer Humira that came off patent this year — also came in below expectations, and the stock fell 8%.

AbbVie shares managed to weather the first quarter of 2023 by trading flat after the storm of the first few weeks when Humira went off patent. We could be in for a period where the stock price bounces around for a few weeks. We are confident, though, that management has a plan to extend revenue growth beyond Humira. But it may take some time for the market to be as confident.

For now, the dividend is safe and we can let our ABBV 28 Apr 165 call expire worthless. The stock is up today, and we will sell a call once we see sustained higher trading.

ACTION: Let the ABBV 28 Apr 165 call expire worthless.

Gilead Sciences (GILD): 81.64

Gilead reported first-quarter results Thursday after the close. Revenue of $6.4 billion was down 4% year over year but came in slightly above expectations. Earnings of $1.37 per diluted share missed estimates by 17 cents.

While sales of its HIV and cancer drugs rose 13% and 59%, respectively, from a year ago, sales of its COVID-19 antiviral, Veklury, were down 63% due to lower rates of COVID-19-related hospitalizations.

The stock is down around 2.5% today, but not so much that we can’t roll our call out strike to strike and pick up a reasonable premium.

ACTION: Roll GILD 28 Apr 84 call to the GILD 19 May 84 call for a net credit of around 0.70 to 0.75.

Buy to close GILD 28 Apr 84 call
Sell to open GILD 19 May 84 call

Southern Co. (SO): 73.76

Southern Co. also reported Q1 results on Thursday. Earnings of $0.79 per share beat by $0.08 while revenue of $6.5 billion exceeded estimates by $360 million. It was a good report, but the stock price is flat today. Go figure.

Southern goes ex-dividend on May 12. Let’s roll our call out one week strike to strike today for a credit.

ACTION: Roll the SO 28 Apr 73 call to the SO 5 May 73 call for a net credit of around 0.43 to 0.48.

Buy to close SO 28 Apr 73 call
Sell to open SO 5 May 73 call

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