Celgene Corporation (NASDAQ: CELG)
As expected, Celgene Corporation released its earnings report this morning before the open of the market. While the earnings report was positive, their stock is down today. So below, we’ll go over the details of the earnings report, what we’ve seen in the market, and try to pinpoint why we’ve seen declines today. So, let’s get right to it.
CELG Beats Earnings
As mentioned above, Celgene Corporation beat earnings for the first quarter. Here’s what we saw…
- Earnings Per Share – While experts were expecting Celgene to generate $0.93 EPS, the company actually reported $0.95.
- Top Line Revenue – Although CELG beat expectations with regard to earnings, top-line revenue was a slight miss. Analysts were expecting to see $2.12 billion, but CELG only produced $2.06 billion.
- Guidance – EPS guidance for the year remains the same at between $4.60 and $4.75.
How The Market Reacted To Celgene Earnings
Although CELG did beat expectations with regard to EPS, the stock isn’t experiencing the normal uptrends we would expect to see in these cases. Unfortunately, we’ve seen declines today. Currently (1:06), CELG is trading at $109.07 per share after a loss of 3.65% so far today.
What’s Causing The Declines?
In this particular case, I think what we’re seeing is reaction to growing competition for Celgene corporation. Investors seem to be focusing on the fact that the company is facing heavy generic competition for several important products; one of the most important being Videza. As we all know, generic competition can drive revenue from medications into the mud; so, this is a very real fear.
What To Expect Moving Forward
While I understand the concerns over generic competition, I’m not sure I’m too concerned. The reality is that even with the mounting competition, the company was able to produce wider than expected gains; and this isn’t the first time. In the long run, I’m expecting CELG to keep doing what they’ve proven to do well; leading to growth. Unfortunately in the short term, I think we can expect to see a bit more price volatility as concerns over generic competition continue to be the forefront of conversation surrounding the stock.
What Do You Think?
Where do you think CELG is headed and why? Let us know in the comments below!