Arena Pharmaceuticals Inc. (ARNA): What to Expect from Earnings

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) gets its turn in the earnings parade Thursday when it releases its quarterly report after the closing bell. The company, which has been in the news for the last couple months since receiving FDA approval for its weight-loss drug, Belviq, has come up a bit short of expectations over the past year. However, the stock has made a nice run over the last three months, so it will be interesting to see if the numbers live up to the stock. Here is an inside look at what may be expected from the report.

Over a three-month period from May 9 to August 8 of this year, the stock of Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) rose more than 110 percent, from $3.42 a share to $7.30 a share. From June 7 to June 21, the stock gained 81 percent of its value when the price rose for 11 straight trading days. After that, however, the stock lost 15 percent of its value over six straight losing sessions from July 13 to July 20.

The average estimates among analysts calls for a net EPS loss of 8 cents, which is an improvement from a minus-16 cent EPS loss in the same quarter of 2011. Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has missed quarterly EPS estimates in each of the last three quarters. On the revenue side, analysts are expecting to see about $7.4 million on the report, which would be a more than two-fold increase from the year-ago quarter and would end two straight quarter of revenue declines. The company reported $2.2 million in revenue in the first quarter of 2012 and $3.9 million in the fourth quarter of 2011.  The company lists an asset-to-liability ratio of more than 7.5, so the company’s overall financial health seems solid.

It is possible that Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) will discuss its marketing and sales plans for Belviq at its conference call later Thursday, though the drug is not expected to hit the market until the first quarter of 2013.