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Celgene Corporation (CELG - Free Report) is scheduled to report first-quarter 2016 results on Apr 28, before the market opens. Last quarter, the company reported a negative earnings surprise of 1.96%. Let's see how things are shaping up for this announcement.

Will Strong Product Sales Drive Q1 Results?

At the time of reporting fourth-quarter 2015 results, Celgene guided 2016 earnings in the range of $5.50 to $5.70 per share with first-quarter 2016 earnings expected in the range of $1.27 to $1.30 per share. Net product sales for 2016 are expected to be $10.5–$11 billion including a negative impact from currency movement of approximately $120 million.

Key drug, Revlimid, should remain the main growth driver in the first quarter of 2016 as well. Market share gains in the U.S., ongoing launches in the newly diagnosed multiple myeloma indication in the U.S. and EU and favorable clinical data should help the drug contribute significantly to the top line. Reimbursement in additional EU countries should further aid revenues. Celgene expects Revlimid net sales in the range of $6.6 billion to $6.7 billion in 2016.

Meanwhile, other products including Abraxane, Pomalyst/Imnovid and the newly launched Otezla should also continue to perform well in the first quarter of 2016 on the back of increased demand, label expansion and global launches.

We note that Celgene is facing generic competition for Vidaza. Moreover, in Mar 2016, the company received a paragraph IV certification notice letter from Allergan plc (AGN - Free Report) . Allergan is looking to get its generic version of Abraxane approved in the U.S.

On the first-quarter call, investor focus is expected to remain on the company’s performance and label expansion efforts along with pipeline updates.

Surprise History

Celgene’s performance has been decent with the company beating earnings estimates on two occasions, while posting in line results in one. Overall, the company has delivered an average positive surprise of 0.74%.Earnings Whispers

Our proven model does not conclusively show that Celgene is likely to beat estimates. 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 for Celgene is 0.00% since the Most Accurate estimate stands in line with the Zacks Consensus Estimate of $1.05.

Zacks Rank: Celgene carries a Zacks Rank #3, which when combined with an ESP of 0.00%, 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 a couple of health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

The Earnings ESP for BioMarin Pharmaceutical Inc. (BMRN - Free Report) is +22.35% and it carries a Zacks Rank #3. The company is scheduled to release first-quarter results on Apr 28.

Amgen Inc. (AMGN - Free Report) has an Earnings ESP of +3.52% and a Zacks Rank #3. It is scheduled to report first-quarter results on Apr 28.

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