Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Jazz Pharmaceuticals (NASDAQ:JAZZ), a specialty biopharmaceutical company that develops therapies to treat a variety of diseases, dipped as much as 10% today after the company reported disappointing first-quarter earnings results following the closing bell last night. Shares rallied into the close and finished lower by just 3%.

So what: For the quarter, Jazz reported a 26% surge in revenue to $246.9 million, versus $196.2 million in the year-ago quarter. The increase was primarily due to a 36% spike in sales of its narcolepsy drug Xyrem, as well as a more modest increase of 12% in sales of Erwinaze/Erwinase. Adjusted profit for the quarter rose to $1.61 per share from $1.37 in the prior-year period. Wall Street had been looking for $254 million in revenue and a more robust $1.79 in earnings per share. Looking ahead, Jazz reaffirmed its previous full-year guidance of $1.1 billion to $1.16 billion in revenue and $8-$8.25 in EPS, in line with Wall Street's expectations. Following this report, Citigroup cut its price target on the company to $165 from $195.

Now what: Wall Street has had a pretty poor track record of predicting Jazz's earnings potential, and has been trounced on numerous occasions. It seems after multiple quarters the Street's aggressive growth targets finally caught up and shares took a bit of a beating today. However, I would note that Xyrem sales continue to look strong and that orphan drug status for Erwinaze/Erwinase should allow that therapy to grow by double digits year over year. I still believe this company should remain on investors' radars, as it's a possible takeover candidate for a number of Big Pharma companies desperate for growth. At less than 13 times forward earnings it's also fairly inexpensive.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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