The Zacks Analyst Blog Highlights: Oracle, Dendreon, Johnson & Johnson, Actelion and Biogen Idec
CHICAGO, Sept. 19, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Oracle (NYSE:ORCL-Free Report), Dendreon Corporation (Nasdaq:DNDN-Free Report), Johnson & Johnson (NYSE:JNJ-Free Report), Actelion Ltd. (OTC:ALIOF-Free Report) and Biogen Idec Inc. (Nasdaq:BIIB-Free Report).
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Here are highlights from Wednesday's Analyst Blog:
Oracle Earnings Mixed, Market Elsewhere
We're not really expecting much of a breakout in the after-market following Oracle's (NYSE:ORCL-Free Report) Q1 (fiscal 2014) earnings report, which was just released after the bell today. The legacy hardware and software provider posted quarterly earnings of 56 cents per share (non-GAAP, excluding amortization and restructuring) on revenues of $8.38 billion. This was a 3-cent beat on the bottom line, but fell short of the Zacks Consensus $8464 million on the top line.
But with the Fed surprising most everyone in the markets today by not beginning to taper quantitative easing (QE), there's little impact Oracle's earnings are likely to have. First, mixed reports usually cause a stock to stay somewhat range-bound near-term, and secondly, Oracle's days as a tech behemoth are a bit in the rearview these days, as cloud computing has taken large bites out of the "old-style" legacy tech firms over the past few years.
Besides, it doesn't look like Oracle's CEO Larry Ellison's really sweating Q1 earnings too much this afternoon; he's right now getting ready to defend his yacht club's America's Cup win from last year. To quote Mel Brooks: "It's good to be da king!"
Anyway, as per normal, analysts covering Oracle have been holding estimates steady over the past quarter. So steady, in fact, that zero estimate revisions have been made by any of the ten analysts following Oracle in the past three months. This quarter's 5.66% positive surprise may not look so huge, but it's the biggest surprise either way in the past 5 quarters. In short, Oracle doesn't seem to present many conundrums (conundra?) for analysts these days.
For the company itself, however, it might be a slightly different story. Hardware revenues have been tough sledding, and they missed expectations in Q1. New software licenses were up 4%, and operating margins were a better-than-expected 45%, but ultimately it's going to come down to migrating from legacy systems to cloud computing (Software-as-a-Service, etc.), and how deftly they can fully implement their new business model relative to its competition.
Obviously, the change won't happen overnight. Heck, even the America's Cup races take longer than a week.
Dendreon's Provenge Cleared in the EU
The European Commission (EC) has recently granted marketing authorization for Dendreon Corporation's (Nasdaq:DNDN-Free Report) Provenge. The drug is approved in the EU for the treatment of asymptomatic or minimally symptomatic metastatic (non-visceral) castrate resistant prostate cancer in adults. Chemotherapy is not yet clinically indicated for these patients.
The EU approval of Provenge does not come as a surprise as, in Jun 2013, the Committee for Medicinal Products for Human Use of the European Medicines Agency (EMA) provided a positive opinion on the approval of the drug. Dendreon also received a favorable opinion from the EMA's Committee for Advanced Therapy (CAT) on its marketing application for Provenge.
Provenge's approval in the EU was based on positive results from the phase III IMPACT (n=737) study in patients suffering from prostate cancer. Results from the study revealed an improvement in overall survival in patients treated with Provenge compared to those in the placebo arm.
Provenge, Dendreon's sole marketed product, has been approved in the U.S. for treating advanced prostate cancer since May 2010. We remind investors that the drug performed disappointingly in the second quarter of 2013 with sales declining 8.4% to $73.3 million. The sharp decline in Provenge sales was primarily due to the entry of Johnson & Johnson's (NYSE: JNJ -Free Report) Zytiga in the prostate cancer market in Dec 2012. Meanwhile, management stated in its second quarter 2013 conference call that Provenge sales will not be able to beat the 2012 sales figure of $325.3 million. Though encouraged by the EU approval, we remain concerned about the decreasing trend of Provenge sales. We are also concerned about Dendreon's high dependence on Provenge for growth.
Dendreon carries a Zacks Rank #3 (Hold). Meanwhile companies such asActelion Ltd. (OTC:ALIOF-Free Report) and Biogen Idec Inc. (Nasdaq:BIIB-Free Report) look better positioned with a Zacks Rank #1 (Strong Buy).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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