Why Celgene Sank to New Low Despite Q3 Earnings Beat

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Celgene Corp. (NASDAQ: CELG) reported its most recent quarterly results before the markets opened on Thursday. Despite mixed results, with earnings were fairly positive for the quarter, this was not enough to outweigh poor guidance. Shares sank to a new 52-week low.

The company posted $1.91 in earnings per share (EPS) and $3.29 billion in revenue, while consensus estimates from Thomson Reuters had called of $1.87 in EPS on revenue of $3.42 billion. In the third-quarter of last year, Celgene said it had EPS of $1.58 and $2.98 billion in revenue.

In terms of its segments, Celgene reported as follows:

  • Revlimid sales for the third quarter increased 10% to $2,081 million.
  • PomaLyst/Imnovid sales for the quarter were $417 million, an increase of 22%.
  • Otezla sales for the third quarter were $308 million, a 12% increase.
  • Abraxane sales for the quarter were $251 million, up 8%.
  • All other product sales, including Idhifa, Thalomid, Istodax, Vidaza and an authorized generic version of Vidaza drug product primarily sold in the United States, totaled $226 million, compared to $228 million in the third quarter of 2016.

As for guidance, Celgene expects to see EPS in the range of $7.30 to $7.35 and revenues of approximately $13.0 billion. Previously, Celgene expected its EPS to be in the range of $7.25 to $7.35 and revenues between $13.0 billion and $13.4 billion. Consensus estimates call for $7.31 in EPS and $13.23 billion in revenue for the full year.

Mark J. Alles, CEO of Celgene, commented:

In consideration of certain market dynamics and recent pipeline events, we are updating our 2020 outlook, and remain confident in our ability to deliver industry leading growth. Over the coming months, we look forward to sharing data supporting our innovative, next generation pipeline products and significant growth drivers.

Shares of Celgene traded early Thursday at $98.05, down around 18% on the day. The consensus analyst price target is $148.29, and a 52-week range now is $95.50 to $147.17.