Why Is Arena Pharmaceuticals (ARNA) Down 11.3% Since the Last Earnings Report?
It has been about a month since the last earnings report for Arena Pharmaceuticals, Inc. ARNA. Shares have lost about 11.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Arena Pharmaceuticals Posts Fourth Quarter Earnings, Revenues Up
Arena Pharmaceuticals reported earnings of $0.16 per share in the fourth quarter of 2016, as against the year-ago loss of $0.13 and the Zacks Consensus Estimate of a loss of $0.09. Higher revenues and lower costs boosted earnings in the quarter.
Total revenue in the quarter stood at $85.4 million, much higher than both the year-ago figure of $7.8 million and Zacks Consensus Estimate of $10 million. Revenues included $15.2 million in net product sales of Belviq, $1.3 million in milestone payments from Eisai and Ildong for Belviq and $66.1 million in the form of upfront Belviq payments.
Quarter in Detail
During the fourth quarter of 2016, Belviq generated sales of $15.2 million, compared with $3.9 million a year ago.
Research & development (R&D) expenses declined 41% year over year to $11.9 million. Likewise, general & administrative (G&A) expenses were $7.3 million, down 24.7% year over year.
2016 Results
Full-year sales totaled $124 million, compared with $38.3 million a year ago. Sales beat the Zacks Consensus Estimate of $48 million by a solid margin.
Full-year loss of $0.09 per share was significantly narrower than Zacks Consensus Estimate of a loss of $0.34. The company had posted a loss of $0.45 a year ago.
2017 Guidance
The company expects net cash used in operating and investing activities in the range of $80 million to $100 million for 2017.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter.
Arena Pharmaceuticals, Inc. Price and Consensus
Arena Pharmaceuticals, Inc. Price and Consensus | Arena Pharmaceuticals, Inc. Quote
VGM Scores
At this time, Arena Pharmaceuticals' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Following the exact same course, the stock was allocated also a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of this revision has been net zero. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.
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Arena Pharmaceuticals, Inc. (ARNA): Free Stock Analysis Report
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