After the closing bell on Tuesday, Amgen Inc. AMGN issued its third-quarter results.
The stock price was up 16 cents (plus 0.08%) to $209.15 in extended trading, although the Thousand Oaks, California-based drug major surpassed estimates on GAAP earnings and revenue.
In fact, GAAP earnings rose 14.3% year over year to $3.27 per share in the third quarter of 2019, exceeding consensus estimates by 12 cents. Revenue came in at $5.74 billion, topping expectations by $110 million. Year over year, the top line was down nearly 3%. Nonetheless, the free cash flow advanced 3.2% to $3.2 billion thanks to favorable working capital changes.
The chart below illustrates Amgen’s total revenue over the past five quarters:
The chart below illustrates Amgen’s third-quarter total revenue over the past five years:
Approximately 95.2% (equivalent to nearly $5.5 billion) of third-quarter total revenue was in product sales. By key product, arthritis treatment Enbrel increased 5.7% to $1.37 billion, and sales of treatment for postmenopausal women with osteoporosis Prolia went up 18.4% to $630 million.
Further increases were recorded in multiple myeloma treatment Xgeva, which went up nearly 10% to $476 million, and in hyperlipidaemia treatment Repatha, which grew 40% to $168 million.
Sales of migraine treatment Aimovig totaled $66 million, and Evenity, another of Amgen’s treatments for postmenopausal women with osteoporosis, reached $59 million.
In contrast, preventative neutropenia product Neulasta dropped 32.4% to $711 million, while anaemia treatment Aranesp decreased 5% to $452 million.
Moreover, in the third quarter Amgen spent $1.2 billion for the repurchase of 6.2 million shares of its own common stock and returned $900 million to its shareholders in the form of quarterly dividends paid. The company paid $1.45 per common share on Sept. 6. The next payment of the same amount will be sent out on Dec. 6.
For full 2019, Amgen expects pro forma earnings per share to fall in the $14.20-$14.45 range on $22.8 billion to $23 billion in projected revenue. Analysts forecast the drug major will post pro forma earnings per share of $14.39 on $22.84 billion in revenue.
The company’s estimates on earnings and revenue don’t include the acquisition of moderate to severe plaque psoriasis treatment Otezla, which should close before the end of 2019.
Amgen closed the third quarter ended Sept. 30 with $24.1 billion in cash and short-term securities and $29.8 billion in total debt. The company shareholders’ equity devalued 12.6% to $10.93 billion from the final quarter of 2018.
Amgen’s stock price has risen 8% to $208.99 per share in the past year through Oct. 29 to place on the top of the 200-, 100- and 50-day simple moving average lines. The stock had a market capitalization of $125.33 billion at close on Tuesday. The 52-week range is $166.3 to $211.9.
Analysts issued an overweight recommendation rating for shares of Amgen with an average target price of $218.53.
Disclosure: I have no position in any security mentioned.
Read more here:
- A Trio of Fairly Priced Stocks for Your Portfolio
- AT&T Rises Following the Release of 3rd-Quarter Results
- 2 Falling Knives With a Buy Recommendation Rating
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
