The U.S. multinational biopharma company Amgen (AMGN, Financial) closed the third quarter with non-GAAP earnings per share of $3.69, reflecting 13% growth year-over-year thanks to an increase in total revenues and a decrease in the tax rate applied to the taxable income. A lower weighted-average volume of shares outstanding also helped Amgen to deliver higher non-GAAP earnings per share, enabling the Thousands Oak, California-headquartered company to beat consensus by 24 cents, producing a positive surprise of 7%.
Amgen's third-quarter revenue totaled $5.904 billion, a 2.3% gain year-over-year, beating expectations by $120 million.
The chart below shows the trend in Amgen’s total revenues over the last recent third quarters:
Total revenues increased because total product sales went up 1% to $5.51 billion in the third quarter from $5.45 billion a year ago.
Among the company's key products, Neulasta sales were $1.05 billion, a 6% decline year-over-year. Enbrel sales were down 5% to $1.29 billion. Aranesp sales were down 8% to $477 million. Prolia sales were up 15% to $532 million. Sensipar and Mimpara sales were $409 million, down 11%.Â
For full fiscal 2018, the U.S. biopharma company forecasted revenue in the $22.3 billion to $23.5 billion range, reflecting 2.2% upside from the previous guidance. Earnings are expected to be $12.23 to $12.55 per share, up from the prior $11.83 to $12.62 range.Â
In addition, the company generated a free cash flow of $3.1 billion, a 6% fall from the comparable quarter of fiscal 2017 because of tax payments timing, the company said. Amgen closed the quarter with nearly $30 billion in cash and securities, an 11.4% decrease. The debt outstanding was $34.4 billion and represented a $1.4 billion decrease from a year ago.
According to the chart powered by GuruFocus, Amgen climbed 8% for the 52 weeks through Oct. 30. The stock was $189.08 per share at close on Tuesday. The results for the third quarter of fiscal 2018 were released after the closing bell. In after-hours trading, the stock fell 0.49% to $188.15 per share on the heels of Amgen’s earnings announcement.
Amgen's dividend yield was 2.81%, higher than the industry median of 0.95%. The share price at close Tuesday was $2.33 over the mid-point of the $163.31 to $210.19 per-share 52-week range.
The average target price for Amgen is $215.15 per share. The estimates on the target price range between a low of $179 and a high of $229. The median of the range has moved nearly 5% more towards the top end, indicating that analysts have generally improved their outlook for Amgen. The target price represents an 8.5% upside from the share price at close Oct. 30.
The recommendation rating is 2.3 out of a total of 5.
Disclosure: I have no position in Amgen.
