) is set to unveil its second quarter 2012 results on July 26, 2012
before the start of trading. The Zacks Consensus Estimate for the
second quarter is $1.06 (year-over-year increase of 35.9%) on
revenues of $1,338 million (year-over-year increase of 13.1%).
First Quarter Recap
Celgene's first quarter 2012 earnings (excluding special items
but including stock-based compensation expense) of $0.96 per share
beat the year-ago earnings by 35%. Higher revenues drove earnings
in the reported quarter. The Zacks Consensus Estimate was $1.02 per
Total revenue climbed 13.2% to $1.27 billion in the first
quarter of 2012. Revenues were boosted by the impressive
performance of Celgene's cancer drugs Revlimid, Abraxane and
Vidaza. Revenues for the quarter were, however, below the Zacks
Consensus Estimate of $1.32 billion.
(Read our detailed discussion on the first quarter earnings
Celgene Misses, Reaffirms
Agreement of Estimate Revisions
Over the past thirty days, 2 of the 5 analysts covering Celgene
for the second quarter of 2012 have revised their earnings
estimates downwards with no upward movement. Earnings estimates for
fiscal 2012 also have a downward bias, with 3 analysts slashing
estimates and 1 moving in the opposite direction over the last 30
days. Fiscal 2013 earnings estimates have been trimmed by 4
analysts over the last 30 days with no upward movement.
We believe that the downward bias is attributable to the setback
suffered by Celgene last month in its efforts to expand the label
of its key growth driver, Revlimid. The company withdrew its
marketing application in the EU where it was seeking approval for
Revlimid as a front-line maintenance therapy for treating patients
suffering from multiple myeloma (MM).
Celgene stated that it intends to re-submit the application in
the EU only when it has more data at its disposal to provide the
European Medicines Agency's (EMA) Committee for Medicinal Products
for Human Use (CHMP) with more visibility on Revlimid's risk-reward
profile for the indication.
Celgene also pushed back its plans to seek approval of Revlimid
for the additional indication in the US. The company now intends to
seek approval from the US Food and Drug Administration (FDA) for
the new indication in 2013 instead of the earlier target of 2012,
announced while releasing its first quarter 2012 results.
Magnitude of Revisions
Given the downward bias in earnings estimate revisions over the
last month, earnings estimates for the second quarter, fiscal 2012
and fiscal 2013 have gone down by a penny, 4 cents and 25 cents to
$1.06, $4.35 and $4.94 respectively.
We have a Neutral recommendation on Celgene. We believe that
Celgene, driven by its impressive oncology portfolio, expansion
efforts, strong balance sheet and robust pipeline, will perform
well in the coming quarters. The stock carries a Zacks #3 Rank
(Hold rating) carried by the stock in the short run.
July 26 will be a busy day on the earnings front in the
pharmaceutical sector. Apart from Celgene, other big players in the
sector, such as
Gilead Sciences Inc.
) are scheduled to report earnings on the same day.
CELGENE CORP (CELG): Free Stock Analysis Report
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