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Celgene’s Financial Position before Its Third-Quarter Earnings

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Revenue trends

Celgene (CELG) is expected to report its third-quarter earnings on October 25. According to Wall Street analysts’ estimates, Celgene is expected to generate revenues of $3.8 billion in the third quarter.

Celgene’s net revenues grew from $3.27 million in the second quarter of 2017 to $3.8 million in the second quarter of 2018, which reflects ~17% growth YoY (year-over-year). Celgene’s net revenues were $7.4 million in the first half of 2018—compared to $6.2 million in the first half of 2017, which reflects ~18% growth YoY.

In Celgene’s third-quarter earnings, the company will report net revenues from its hematology and oncology franchise and inflammation and immunology franchise.

Celgene’s peers in the biopharmaceuticals market, Biogen (BIIB), Amgen (AMGN), and Gilead Sciences (GILD) generated revenues of $3.35 billion, $6.1 billion, and $5.6 billion, respectively, in the second quarter, which reflects ~9.03% YoY growth, ~4.29% YoY growth, and an ~20.91% YoY decline.

Wall Street analysts expect Biogen and Amgen to report net revenues of $3.3 billion and $5.8 billion, respectively, in the third quarter.

Celgene’s revenue growth could boost the iShares Nasdaq Biotechnology ETF’s (IBB) share prices. Celgene, Amgen, Biogen, and Gilead Sciences account for ~7.43%, ~8.68%, ~8.17%, and ~8.48% of IBB’s total portfolio holdings, respectively.

Expense trends

Celgene reported cost of goods sold (excluding amortization of acquired intangible assets) of $261.0 million in the first half of 2018—compared to $224.0 million in the first half of 2017. Celgene reported R&D (research and development) and SG&A (selling, general, and administrative) expenses of $3.5 billion and $1.7 billion, respectively, in the first half of 2018. In the first half of 2017, Celgene had R&D and SG&A expenses of $1.8 billion and $1.6 billion, respectively.

Celgene reported cost of sales, R&D, and SG&A expenses of 126.0 million, $1.25 billion, and $790.0 million, respectively, in the second quarter.

Walls Street analysts expect that Celgene could report cost of sales of $134.5 million and a gross profit margin of 96.70% in the third quarter.

Next, we’ll discuss Celgene’s earnings projections and analysts’ recommendations

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