Will Celgene (CELG) Miss this Earnings Season? - Analyst Blog

Celgene Corporation CELG is set to report first quarter 2014 results on Apr 24 before market opens. Last quarter, the company had delivered a negative earnings surprise of 4.32%. Let's see how things are shaping up for this announcement.

Factors at Play

While products like Revlimid, Abraxane and Pomalyst/Imnovid should continue performing well, Vidaza sales will remain under pressure due to soft demand in the U.S. (resulting from generic competition). Sales of another cancer drug at Celgene, Thalomid, will also continue to decline due to the availability of better alternatives.  Moreover, results will be affected by higher operating costs as Celgene continues to develop its pipeline. Celgene's efforts to market Pomalyst/ Imnovid and Otezla effectively will also push operating costs higher. Otezla was approved in the U.S. last month for the treatment of adults suffering from active psoriatic arthritis.

Earnings Whispers?

Our proven model does not conclusively show that Celgene is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Celgene is 0.00% since the Most Accurate Estimate stands at $1.43, in line with the Zacks Consensus Estimate.

Zacks Rank #3 (Hold): Celgene's Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Earnings ESP and a Zacks Rank #1, #2 or #3:

Forest Laboratories Inc. FRX has an Earnings ESP of +4.55% and holds a Zacks Rank #3. Forest Lab will be reporting fourth quarter fiscal 2014 earnings on Apr 29 before market opens.

Actavis ACT has an Earnings ESP of +3.34% and holds a Zacks Rank #2 (Buy). Actavis will be reporting first quarter earnings on Apr 30 before market opens.

Eli Lilly and Company LLY has earnings ESP of +4.29% and holds a Zacks Rank #3. Eli Lilly will report first quarter earnings on Apr 24.