Celgene (NASDAQ: CELG) may have finally turned the corner. The company reported second-quarter results that are better than markets expected. If the company continues to deliver in the next few quarters, then the Celgene may continue to reward its investors.
Celgene earned $2.16 a share as revenue grew 16.5% from last year to $3.81 billion. Revlimid sales rose 20.6% to $2.453 billion, Pomalyst/Imnovid sales increased 29.7% to $507 million, and Otezla sales rose modestly by ~ 5% to $375 million. Although net income fell 5.1% from last year to $1.045 billion, non-GAAP EPS rose 15.5% to $2.16.
Celgene lowered its net income guidance for 2018 and trimmed its EPS guidance to $5.95 - $6.25. In the longer-term, five late-stage potential blockbusters could drive growth by the end of 2020. The near-term uncertainties will come mostly from potential speedbumps as the next stage of Celgene’s innovation cycle unfolds.
In Q2, management took advantage of the weak share price by buying back more shares. Celgene bought back $3.3 billion worth of shares and has $2.8 billion left. Due to that sizable spend, the company will not buy back as much shares for the rest of the year. It spent $10 billion year-to-date on M&A and in areas that would fuel future growth.
Takeaway
Celgene continues to trade in value territory. This discount will shrink as it launches new products.
