Shares of Bristol Myers Squibb (BMY 0.66%) were down 8.3% as of 11:19 a.m. ET on Thursday. The sell-off came after the big drugmaker announced its first-quarter results before the market opened.
Bristol Myers Squibb reported Q1 revenue of $11.9 billion, up 5% year over year. The company posted a loss of $5.89 per share based on generally accepted accounting principles (GAAP) compared to a profit of $1.07 per share in the prior-year period. It also announced a non-GAAP loss of $4.40 per share, down from earnings of $2.05 per share in the first quarter of 2023.
Why did investors react so negatively to Bristol Myers Squibb's update?
The decline in Bristol Myers Squibb's share price today wasn't because of its Q1 numbers. The company's revenue came in above the consensus estimate of nearly $11.5 billion. Analysts also expected Bristol Myers Squibb to post a steeper loss of $4.44 per share.
So why did investors react so negatively to Bristol Myers Squibb's update? The drugmaker's guidance was disappointing.
Bristol Myers Squibb projects diluted non-GAAP earnings per share for full-year 2024 between $0.40 and $0.70. Its outlook in February was for non-GAAP earnings per share between $7.10 and $7.40. The big downward revision in guidance was primarily due to the company's acquisition of Karuna Therapeutics and a collaboration with SystImmune.
Is the big pharma stock a buy?
Investors seeking near-term gains will be better off staying on the sidelines in the case of Bristol Myers Squibb. The company faces patent expirations for two of its blockbuster drugs -- Eliquis and Opdivo -- over the next three years. However, with a dividend yield of over 5.3%, Bristol Myers Squibb could be attractive to income investors prepared to hold the stock for the long term.
