Celgene (Nasdaq:CELG) is expected to report increased earnings when it releases its third quarter results on Thursday, October 25, 2012. The consensus estimate is anticipating a profit of $1.16 a share, an increase from last year's 97 cents per share.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: 5 Tricks Companies Use During Earnings Season
What to Expect: Analysts are expecting Celgene to report earnings of $1.16 per share, up 19.6% from a year ago, when the company reported earnings of 97 cents per share.
In the last 30 days, the consensus estimate has fallen from $1.17, still ahead of the consensus estimate of $1.15 three months ago. Analysts are projecting earnings of $4.46 per share for the fiscal year.
Celgene is expected to report revenue of $1.41 billion for the quarter, beating last year's figure of $1.25 billion by 12.8%. Celgene is expected to report revenue of $5.5 billion for the fiscal year.
Company Performance: Over the past four quarters, Celgene has reported double-digit revenue growth. On average, the figure has risen by 21.4%. The biggest change came in the third quarter of the last fiscal year when revenue rose 37.3%.
CELG has a P/E ratio of 21.8. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: How To Find P/E And PEG Ratios
The stock price has increased from $64 on July 24, 2012 to $75.16 over the past quarter. Celgene's best recent streak was when its price gained $3.99 per share between September 6, 2012 and October 18, 2012.
The Competition: Celgene is a biopharmaceutical company that develops innovative therapies to treat cancer and immune-inflammatory related diseases. Analysts are optimistic about Celgene, with 22 of 28 assigning it a buy rating. They have grown a bit more optimistic about the stock, as the number of buy ratings has inched up over the past three months.
The company's closest competitor in the biotechnology and drugs industry is Merck (MRK). Analysts are more optimistic about Celgene than about Merck. Only 10 out of 17 analysts rate the latter a buy.