Is Celgene’s Outlook Good Enough for Investors?

Celgene reported $1.01 in earnings per share and $2.09 billion in revenue for the fourth quarter. Thomson Reuters had consensus estimates of $0.99 in earnings per share and $2.08 billion in revenue. In the fourth quarter of the previous year, Celgene posted $0.76 in earnings per share and revenue of $1.76 billion.

Celgene gave guidance for the 2015 full year. Total net product sales are expected to be $9.0 billion to $9.5 billion, with and $4.60 to $4.75 in EPS for the year. The consensus estimates are $4.87 in EPS and $9.29 billion in revenue.

Adjusted R&D expenses were $478 million for the fourth quarter of 2014, compared to $460 million for the fourth quarter of 2013.

Operations generated cash flow of $2.81 billion for 2014, up 26% from the same period in the previous year. Celgene purchased approximately $2.93 billion of shares last year. At the end of December, Celgene had $3.14 billion remaining under the existing share repurchase program. The company ended the year with $7.55 billion in cash and marketable securities and roughly 800 million actual shares outstanding and 835 million fully diluted shares.

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Celgene’s net product sales performance compared to the fourth quarter of the previous year:

• Revlimid increased 16% to $1.32 billion.
• Abraxane increased 17% to $236 million.
• Pomalyst/Imnovid sales were $202 million in their first year.
• Vidaza increased 8% to $154 million.
• Otezla sales were $47 million.
• All other product sales were $93 million, compared to last year’s $98 million.

Bob Hugin, chairman and CEO of Celgene, said:

2014 was an outstanding year for Celgene with strong operating and financial results. Our significant operating momentum along with a number of key milestones provide great opportunity for 2015 and beyond.

On January 13, JMP Securities maintained a Market Outperform rating and raised its price target to $133 from $117. On the same day, Cantor Fitzgerald had a Buy rating and set its price target at $131.

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Shares of Celgene closed Wednesday down 2.8% at $118.97. After the earnings report was released, shares were down about 1% at $117.49 just after the opening bell but recovered later in the morning. The stock has a consensus analyst price target of $125.17 and a 52-week trading range of $66.85 to $124.60.