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Bristol-Myers Squibb Third Quarter Earnings Preview
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BMY
When Bristol-Myers Squibb (NYSE:BMY) releases its third quarter earnings on Wednesday, October 24, 2012, analysts are expecting a 32.8% drop in earnings from a year ago. The consensus estimate is 41 cents per share, down from earnings of 61 cents per share a year ago.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Earnings: Quality Means Everything
What to Expect: Three months ago, the consensus estimate was 43 cents. Analysts are expecting earnings of $1.92 per share for the fiscal year.
Bristol-Myers' expected revenue of $3.97 billion for the quarter is below last year's reported figure of $5.34 billion by 25.7%. The anticipated revenue for the fiscal year is $17.84 billion.
Company Performance: In the second quarter, Bristol-Myers broke a three-quarter growth streak with a year-over-year decline in revenue. After rising 4.8%in the first quarter, 6.7% in the fourth quarter of the last fiscal year and 11.4% in the third quarter of the last fiscal year, it fell 18.2% in the most recent quarter.
Compared to the industry average of 14.23, BMY's P/E ratio of 16.5 is quite high. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. The P/E ratio has been used for ages by analysts and still remains one of the most relevant pieces of stock valuation. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: Investment Valuation Ratios: Price/Earnings Ratio
Since July 23, 2012, the stock price has dipped 1.9% to $34.29 from $34.97. Bristol-Myers' stock price is currently in the middle of a rising streak. The stock has risen $1.34 per share since October 11, 2012.
The Competition: Bristol-Myers Squibb is a global company that develops, manufactures, and sells pharmaceutical products. Analysts generally consider Bristol-Myers a hold, with 11 of 20 analysts rating it as such. Buy ratings have increased slightly over the last three months.
The company's closest competitor in the biotechnology and drugs industry is Johnson & Johnson (JNJ). Analysts are more optimistic about Bristol-Myers than about Johnson & Johnson. Only 14 out of 22 analysts rate the latter a buy compared to eight of 20 for the former.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Earnings: Quality Means Everything
What to Expect: Three months ago, the consensus estimate was 43 cents. Analysts are expecting earnings of $1.92 per share for the fiscal year.
Bristol-Myers' expected revenue of $3.97 billion for the quarter is below last year's reported figure of $5.34 billion by 25.7%. The anticipated revenue for the fiscal year is $17.84 billion.
Company Performance: In the second quarter, Bristol-Myers broke a three-quarter growth streak with a year-over-year decline in revenue. After rising 4.8%in the first quarter, 6.7% in the fourth quarter of the last fiscal year and 11.4% in the third quarter of the last fiscal year, it fell 18.2% in the most recent quarter.
Since July 23, 2012, the stock price has dipped 1.9% to $34.29 from $34.97. Bristol-Myers' stock price is currently in the middle of a rising streak. The stock has risen $1.34 per share since October 11, 2012.
The Competition: Bristol-Myers Squibb is a global company that develops, manufactures, and sells pharmaceutical products. Analysts generally consider Bristol-Myers a hold, with 11 of 20 analysts rating it as such. Buy ratings have increased slightly over the last three months.
The company's closest competitor in the biotechnology and drugs industry is Johnson & Johnson (JNJ). Analysts are more optimistic about Bristol-Myers than about Johnson & Johnson. Only 14 out of 22 analysts rate the latter a buy compared to eight of 20 for the former.
by
Investopedia Staff
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