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Celgene (CELG) Q4 Earnings: Will the Stock Pull a Surprise?
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Celgene Corporation is scheduled to report fourth-quarter 2016 results on Jan 26, before the opening bell. Last quarter, the company reported a positive earnings surprise of 6.11%.
Notably, shares of Celgene have outperformed the Zacks classified Medical-Biomedical and Genetics industry in the past one year, despite challenging conditions in the sector owing to constant media and political focus on drug pricing issues. Specifically, the stock gained 10.3% during this period, while the industry lost 9.6%.
Celgene’s track record has been pretty decent with the company beating earnings estimates thrice in the trailing four quarters. Overall, the company has delivered an average positive surprise of 4.94%.
Let's see how things are shaping up at the company ahead of this announcement.
Core Products to Drive Q4 Results
Celgene’s key product, Revlimid, should continue acting as the main growth driver in the fourth quarter, driven by market share gains in important markets and longer treatment duration. Meanwhile, Revlimid’s launch in the newly diagnosed multiple myeloma indication across geographies is on track.
Pomalyst/Imnovid should continue to grow globally on the back of robust demand despite stiff competition. Securing reimbursement in additional countries, particularly in Japan, should boost the drug’s sales in the international markets. While physician and consumer campaigns continue to propel demand for Otezla in the U.S., the company is working on securing reimbursement in several key EU markets. Label expansion of these drugs will aid the top line.
Abraxane should maintain its position in the U.S. with stable market shares in breast, lung and pancreatic cancers, and continue to grow outside the U.S. in the pancreatic cancer indication.
Meanwhile, Celgene’s share buyback program should boost the bottom line.
As per the preliminary results announced earlier this month, the company expects adjusted earnings of approximately $5.94 per share in 2016, up 26% year over year. Net product sales are expected to be up 22% to approximately $11.2 billion.
In 2016, Revlimid sales are projected to be around $7 billion, up 20%. Sales of Abraxane will likely inch up 1% to $973 million. Pomalyst/Imnovid is expected to contribute $1.3 billion (up 33%) to Celgene’s revenues. Otezla is anticipated to cross the $1 billion mark (up a whopping 116%).
Along with the preliminary results, Celgene raised its guidance for 2017. The company guided earnings in the range of $7.10–$7.25 per share. At the time of announcing its third-quarter 2016 results, the company had projected earnings at the high end of the $6.75–$7.00 per share range.
Total revenue is now projected to be approximately $13.0 billion to $13.4 billion, up 18% year over year. Earlier, the company had expected revenues at the high end of the $12.7–$13 billion range. Unfavorable foreign exchange is expected to impact revenues by about $170 million.
Revlimid sales are now expected in the range of $8.0 billion to $8.3 billion, compared with the previous expectations of greater than $8 billion.
On the fourth-quarter call, investors are expected to gain more visibility on the company’s performance and label expansion efforts, along with updates on the pipeline front.
Earnings Whispers
Our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.43.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Celgene’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Eli Lilly and Company (LLY - Free Report) has an Earnings ESP of +3.06% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Jan 31.
Merck & Co., Inc. (MRK - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb 2.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Celgene (CELG) Q4 Earnings: Will the Stock Pull a Surprise?
Celgene Corporation is scheduled to report fourth-quarter 2016 results on Jan 26, before the opening bell. Last quarter, the company reported a positive earnings surprise of 6.11%.
Notably, shares of Celgene have outperformed the Zacks classified Medical-Biomedical and Genetics industry in the past one year, despite challenging conditions in the sector owing to constant media and political focus on drug pricing issues. Specifically, the stock gained 10.3% during this period, while the industry lost 9.6%.
Celgene’s track record has been pretty decent with the company beating earnings estimates thrice in the trailing four quarters. Overall, the company has delivered an average positive surprise of 4.94%.
Celgene Corp. Price and EPS Surprise
Celgene Corp. Price and EPS Surprise | Celgene Corp. Quote
Let's see how things are shaping up at the company ahead of this announcement.
Core Products to Drive Q4 Results
Celgene’s key product, Revlimid, should continue acting as the main growth driver in the fourth quarter, driven by market share gains in important markets and longer treatment duration. Meanwhile, Revlimid’s launch in the newly diagnosed multiple myeloma indication across geographies is on track.
Pomalyst/Imnovid should continue to grow globally on the back of robust demand despite stiff competition. Securing reimbursement in additional countries, particularly in Japan, should boost the drug’s sales in the international markets. While physician and consumer campaigns continue to propel demand for Otezla in the U.S., the company is working on securing reimbursement in several key EU markets. Label expansion of these drugs will aid the top line.
Abraxane should maintain its position in the U.S. with stable market shares in breast, lung and pancreatic cancers, and continue to grow outside the U.S. in the pancreatic cancer indication.
Meanwhile, Celgene’s share buyback program should boost the bottom line.
As per the preliminary results announced earlier this month, the company expects adjusted earnings of approximately $5.94 per share in 2016, up 26% year over year. Net product sales are expected to be up 22% to approximately $11.2 billion.
In 2016, Revlimid sales are projected to be around $7 billion, up 20%. Sales of Abraxane will likely inch up 1% to $973 million. Pomalyst/Imnovid is expected to contribute $1.3 billion (up 33%) to Celgene’s revenues. Otezla is anticipated to cross the $1 billion mark (up a whopping 116%).
Along with the preliminary results, Celgene raised its guidance for 2017. The company guided earnings in the range of $7.10–$7.25 per share. At the time of announcing its third-quarter 2016 results, the company had projected earnings at the high end of the $6.75–$7.00 per share range.
Total revenue is now projected to be approximately $13.0 billion to $13.4 billion, up 18% year over year. Earlier, the company had expected revenues at the high end of the $12.7–$13 billion range. Unfavorable foreign exchange is expected to impact revenues by about $170 million.
Revlimid sales are now expected in the range of $8.0 billion to $8.3 billion, compared with the previous expectations of greater than $8 billion.
On the fourth-quarter call, investors are expected to gain more visibility on the company’s performance and label expansion efforts, along with updates on the pipeline front.
Earnings Whispers
Our proven model does not conclusively show that Celgene is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at $1.43.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Although Celgene’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
AbbVie Inc. (ABBV - Free Report) is scheduled to report fourth-quarter results on Jan 27. It has an Earnings ESP of +0.83% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Eli Lilly and Company (LLY - Free Report) has an Earnings ESP of +3.06% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Jan 31.
Merck & Co., Inc. (MRK - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb 2.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>