) is set to unveil its fourth quarter and full year 2011 results on
January 26, 2012 before the start of trading. The Zacks Consensus
Estimate for the fourth quarter is 95 cents (year-over-year
increase of 53.2%) on revenues of $1,289 million (year-over-year
increase of 20.9%).
For 2011, the Zacks Consensus Estimate is $3.33 (year-over-year
increase of 38.2%) on revenues of $4,827 million (year-over-year
increase of 33.3%).
Third Quarter Recap
Celgene's third quarter 2011 earnings (excluding special items
but including stock-based compensation expense) of 90 cents per
share beat the Zacks Consensus Estimate by 4 cents and the year-ago
earnings by 25 cents. Higher revenues boosted earnings in the
Total revenues climbed 37% to $1.25 billion in the third quarter
of 2011. Revenues were boosted by the impressive performance of
Celgene's cancer products Revlimid and Vidaza.
(Read our full coverage on this earnings report:
Celgene Tops, Guides Up
Agreement of Estimate Revisions
Despite having a long-term positive outlook on the stock, some
analysts have become a tad cautious regarding the performance of
Celgene in the to-be-reported quarter. Consequently, 2 of the 4
analysts covering the stock for the final quarter of 2011 have
slashed earnings estimates over the last 30 days.
No upward revision has been observed in the time period. We
believe that the downward bias is primarily due to the lower than
expected preliminary revenues announced by Celgene earlier this
month. Fiscal 2011 earnings estimates too have a similar downward
bias over the last 30 days.
However, the long-term prospects of the stock are bright. This
is reflected by the upward bias observed in fiscal 2012 earnings
estimate revisions over the last 30 days. Two of the four analysts
covering the stock for fiscal 2012 have increased their fiscal 2012
earnings estimates as opposed to a sole downward revision.
The optimism is shared by Celgene's management which gave a
bright outlook for fiscal 2012 at the fourth quarter preliminary
results. Adjusted earnings (excluding stock-based compensation
expense and other special items) for 2012 are projected in the
range of $4.70-$4.80 per share, up 25% year over year.
Given the strong oncology portfolio, we expect Celgene to easily
achieve the 2012 guidance. We are also impressed by Celgene's
robust pipeline, which includes approximately 25 late-stage and 20
early-stage candidates. Key pipeline related news are expected in
2012. Positive news regarding the pipeline would boost the stock
Magnitude of Revisions
Estimates for the fourth quarter of 2011 as well as fiscal 2011
have decreased by 5 cents over the last 30 days due to the downward
bias in estimate revisions. Fiscal 2012 estimates have gone up by
16 cents per share to $4.13 over the last 30 days following the
bright outlook given by the company for 2012.
Celgene has surpassed earnings estimates in two of the last four
quarters. The company recorded a maximum positive surprise of
12.79% in the third quarter of 2011. On average, the earnings
surprise was 2.09%.
We have an Outperform recommendation on Celgene. We believe that
Celgene, driven by its impressive oncology portfolio, expansion
efforts, strong balance sheet and robust pipeline, will outperform
the broader market in the coming quarters.
Our optimism is justified by the Zacks #2 Rank (Buy rating)
carried by the stock in the short run.
CELGENE CORP (
): Free Stock Analysis Report
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