Celgene Corp. (NASDAQ:CELG)

Reported Net Income Trends

The reported net income exhibited fluctuations over the five-year period. Starting at 2,000 million US dollars in 2014, there was a decline to 1,602 million in 2015. This was followed by a recovery to 1,999 million in 2016. Subsequently, the net income increased substantially, reaching 2,940 million in 2017 and further rising to 4,046 million in 2018. Overall, the data reflects a strong upward trend in the last two years after an initial dip.

Adjusted Net Income Trends

The adjusted net income demonstrated a different pattern, starting higher than the reported figure at 2,324 million in 2014. It then decreased significantly in 2015 to 1,413 million, the lowest over the observed period. A recovery occurred in 2016 with the adjusted net income reaching 1,872 million. The most notable increases were observed in 2017 and 2018, where the figures rose to 3,358 million and 4,053 million respectively. The adjusted net income trend closely follows the reported net income's general growth pattern in the latter years but starts with a more pronounced decline and recovery.

Comparison Between Reported and Adjusted Net Income

Throughout the period, adjusted net income was generally higher than the reported net income except for 2017 and 2018, where the figures converged closely. The disparity between the two measures was largest in 2014 and 2015, indicating significant adjustments made to the net income during those years. By the end of the period, the close alignment suggests fewer substantial adjustments or converging accounting treatments.

The financial data reveals several notable trends over the period from 2014 to 2018 across key profitability and return ratios.

Net Profit Margin

Both reported and adjusted net profit margins experienced a decline from 2014 to 2016, with reported margins dropping from 26.44% to 17.87%, and adjusted margins falling more sharply from 30.72% to 16.73%. However, from 2016 onwards, there was a consistent recovery and growth, leading to margins reaching approximately 26.5% by 2018. The convergence of reported and adjusted margins in 2018 indicates stabilization in profitability after adjustments.

Return on Equity (ROE)

ROE figures demonstrate a strong upward trend overall. The reported ROE decreased slightly from 30.65% in 2014 to 27.07% in 2015, then recovered and increased substantially to 65.67% by 2018. Adjusted ROE followed a similar pattern, with an initial dip from 35.61% (2014) to 23.87% (2015), followed by a sharp rise to 65.78% by 2018. This suggests improved equity profitability, notably accelerating in the last two years of the period.

Return on Assets (ROA)

ROA metrics also indicate a decline in the earlier part of the period, with reported ROA dropping from 11.53% (2014) to 5.92% (2015), and adjusted ROA from 13.4% to 5.22%. Post-2015, both measures steadily improved, reaching around 11.4% by 2018. The rise in ROA after 2015 reflects better asset utilization and operational efficiency in the latter years.

Overall, the data suggests that after a period of reduced profitability and returns in 2015 and 2016, the company achieved significant recovery and growth through 2017 and 2018. The pronounced increases in ROE, supported by similar improvements in net profit margins and ROA, indicate enhanced financial performance and effective management of equity and assets during this timeframe.

Net Income Trends

Reported net income exhibited variability over the five-year period. After a decline from 2000 million US dollars in 2014 to 1602 million in 2015, it rebounded to 1999 million in 2016, followed by steady growth reaching 4046 million by 2018. Adjusted net income followed a similar overall pattern but with greater fluctuation, dropping significantly from 2324 million in 2014 to 1413 million in 2015. Subsequently, it increased to 1872 million in 2016, rose sharply to 3358 million in 2017, and ultimately reached 4053 million in 2018.

Profit Margin Analysis

The reported net profit margin showed a declining trend from 26.44% in 2014 to a low of 17.49% in 2015, then maintaining a relatively stable range near 17.87% in 2016. This margin improved notably in the following years, rising to 22.66% in 2017 and 26.51% in 2018, almost reaching its initial level at the beginning of the period.

The adjusted net profit margin mirrored this pattern but with more pronounced fluctuations. Initially, it decreased sharply from 30.72% in 2014 to 15.42% in 2015. Following this, the margin edged up slightly to 16.73% in 2016, then gained considerable strength, climbing to 25.88% in 2017 and 26.55% in 2018, nearly matching the reported margin and indicating a strong recovery in profitability when adjustments are taken into account.

Insights and Observations

Both reported and adjusted net income recovered strongly after the dip in 2015, with increases sustained through 2018. Adjusted net income and margins indicate more volatility, suggesting the presence of significant adjustments affecting profitability assessments. The alignment of reported and adjusted margins by 2018 signals increased consistency in earnings quality or fewer extraordinary items impacting the adjusted figures. Overall, profitability improved substantially in the latter part of the period, reflecting enhanced operational efficiency or favorable market conditions.

The financial data demonstrates notable fluctuations and growth over the reported periods. Both the reported and adjusted net income exhibit an overall upward trend, despite some variation between consecutive years.

Net Income

Reported net income started at $2,000 million in 2014, declined to $1,602 million in 2015, then recovered to $1,999 million in 2016. Thereafter, it significantly increased to $2,940 million in 2017 and further to $4,046 million by 2018, reflecting a strong growth trajectory in the last two years of the period.

Adjusted net income follows a somewhat similar pattern but starts at a higher value of $2,324 million in 2014. It declined more sharply to $1,413 million in 2015, rose to $1,872 million in 2016, then markedly increased to $3,358 million in 2017 and edged up slightly to $4,053 million in 2018, aligning closely with the reported net income in the final year.

Return on Equity (ROE)

Reported ROE experienced some variability but shows a general upward trend, starting at 30.65% in 2014, dipping to 27.07% in 2015, then rising to 30.29% in 2016. It grew substantially to 42.48% in 2017 and peaked at 65.67% in 2018, indicating improving profitability relative to shareholders’ equity.

Adjusted ROE mirrors the reported ROE trend with slightly differing percentages. Starting at 35.61% in 2014, it decreased to 23.87% in 2015, then increased to 28.36% in 2016. A strong rise occurred in 2017 to 48.52%, followed by a further increase to 65.78% in 2018, confirming enhanced returns on equity after adjustments.

Overall, the data reflects an initial setback in 2015 for both net income and ROE, followed by continuous improvements and strong performance gains from 2016 onwards. The convergence of reported and adjusted figures by 2018 suggests alignment in accounting methodologies or effective operational adjustments contributing to improved financial outcomes.

Net Income Trends

Reported net income displayed fluctuations over the reported periods. It started at 2000 million US dollars in 2014, decreased to 1602 million in 2015, and then showed a recovery trend, rising to 1999 million in 2016, 2940 million in 2017, and reaching a peak of 4046 million in 2018. Adjusted net income followed a similar, though somewhat more variable, pattern with 2324 million in 2014, a decline to 1413 million in 2015, a rise to 1872 million in 2016, a more pronounced increase to 3358 million in 2017, and a slight increase to 4053 million in 2018.

Return on Assets (ROA) Trends

Reported ROA exhibited a downward movement from 11.53% in 2014 to 5.92% in 2015, followed by a gradual increase to 7.12% in 2016, 9.75% in 2017, and reaching 11.4% in 2018. Adjusted ROA started higher at 13.4% in 2014 but showed a sharper decline to 5.22% in 2015, then recovered steadily to 6.66% in 2016, 11.14% in 2017, and slightly increased to 11.42% in 2018.

Comparative Observations

Both reported and adjusted figures reveal a dip in 2015, followed by consistent improvement through 2018. Adjusted net income and ROA tend to be higher than their reported counterparts except in 2018 where they converge closely. The recovery and growth in net income and ROA from 2016 onwards suggest an improving operational efficiency and profitability in the latter part of the analyzed period.