Amgen Inc. (AMGN, Financial) released its first-quarter 2017 financial results on April 26.
The global biopharmaceutical company closed the quarter with non-GAAP EPS of $3.15, an 8.6% increase on a year-over-year basis. The company beat analysts’ expectations by 15 cents, generating a positive surprise of 5%.
Source: Yahoo Finance
Analysts forecasted an average EPS of $3, ranging between a low of $2.8 and a high of $3.19. The non-GAAP operating income for the quarter was $2.995 billion, a 5% increase from $2.859 billion in the comparable quarter of 2016. Non-GAAP net income was $2.333 billion versus a net income of $2.203 billion at the end of first-quarter 2016.
Revenue came in at $5.464 billion, a 1.3% decrease on a year-over-year basis. The company missed expectations by $140 million.
Source: Yahoo Finance
Analysts forecasted Amgen’s revenue would come in aroung $5.6 billion. Estimates ranged between a low of $5.33 billion and a high of $5.82 billion. For next quarter, analysts predict revenue will be $5.75 billion. For the year, they expect a 0.10% increase to $23.01 billion from $22.99 billion in 2016.
Total product sales decreased 1% to $5.199 billion in first-quarter 2017 from $5.239 billion in first-quarter 2016.
Among the company's key products, Neulasta sales were $1.21 billion, up 2% year over year. Enbrel sales were down 15% at $1.181 billion. Aranesp sales were down 4% at $511 million. Prolia sales were up 21% at $425 million.
Sensipar/Mimpara sales were $421 million, up 15% on a year-over-year basis. XGEVA sales were up 6% at $402 million. Epogen sales were down 10% at $270 million. Kyprolis sales were up 23% at $190 million.
The company generated $2.385 billion in cash flow from operations, a solid 24.5% increase from the comparable quarter of 2016. After considering capital expenditures of $168 million, a 7.7% increase on a year-over-year basis, free cash flow grew 26% to $2.217 billion from $1.759 billion a year ago.
Amgen expects full-year revenue between $22.3 billion and $23.1 billion, which is unchanged from the company’s previous guidance. EPS will range between $10.64 and $11.32 while non-GAAP EPS will range between $12 and $12.60. Capital expenditures are expected to be approximately $700 million in 2017.
Amgen closed at $164.61 per share yesterday, down nine cents or 0.05% from the previous trading day, with a volume of 3,254,269 shares traded on the New York Stock Exchange.
The stock is uptrending again after a significant pullback in mid-March and has gained 12.6% year to date. It is currently trading with a price-earnings (P/E) ratio of 16.08, a price-book (P/B) ratio of 4.07 and a price-sales (P/S) ratio of 5.27.
The forward P/E ratio is 12.93. The biopharma stock seems to be a bit overvalued based on its current share price considerering the EPS forecast of $12.33 for fiscal 2017.
Analysts see an average 12.5% upside for Amgen as the estimated average price target is $185.13. The target price ranges between a low of $158.51 and a high of $212.
The recommendation rating is 2 and ranges between 1 (Strong Buy) and 5 (Sell).
Jefferies recently downgraded Amgen from buy to hold. The biopharma stock has received one upgrade and two downgrades over the last 12 months. UBS set its rating as neutral, Oppenheimer to outperform and Mizuho to buy. Gabelli & Co. and Bernstein initiated coverage of Amgen recently, setting respective ratings of hold and market perform.
The company has approximately $38.4 billion in cash and securities as of March 31, a 0.82% increase from the last quarter of 2016. Long-term debt amounts to $30.3 billion, a $100 million reduction from the previous quarter.
During the first quarter, Ken Fisher (Trades, Portfolio) decreased his Amgen stake by 0.10% to 123,020 shares.
Disclosure: I have no position in Amgen Inc.
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