Shares of Amgen (NASDAQ:AMGN) rose 3% in premarket trading Today after the biopharmaceutical company revised its 2023 revenue forecast upwards from $26.6B-$27.4B to a range of $28B-$28.4B, significantly outperforming analysts' predictions. The firm also adjusted its expected EPS for 2023 to be between $18.20-$18.80, surpassing both its previous guidance and analysts' estimate of $18.26.
For the third quarter of 2023, the company reported a top-line growth of 4% year-over-year (Y/Y), taking total revenues to $6.9B. However, this fell short of Wall Street estimates due to a 6% Y/Y decline in sales of its top-selling drug Enbrel, attributed to unfavorable changes in estimated sales deductions.
Despite these challenges, Amgen's bottom-line performance improved with a 6% increase in adjusted EPS to $4.96, beating market expectations. The company's operating expenses grew by 4%, and its cost of sales margin increased by 1.3 percentage points. Research and development expenses dropped by 2%, reflecting lower spending in research and early pipeline, offset by higher spending in later-stage clinical programs and marketed products.
Amgen's Q3 2023 free cash flow stood at $2.5B, marking a decrease from $2.8B in Q3 2022.
The company also reported that it is preparing for a $650 million impairment charge resulting from the termination of AMG 340, an experimental prostate cancer treatment.
Despite the mixed results and impending impairment charge, AMGN stock holds a Moderate Buy consensus among analysts, indicating cautious optimism about the company's future performance.
InvestingPro Insights
InvestingPro's real-time data and tips provide valuable insights into Amgen's performance and potential. The company's market cap stands at an impressive 135.13B USD, and with a P/E Ratio of 16.82, it offers an attractive valuation for investors. The company's revenue growth for Q2 2023 is 0.75%, indicating a steady increase in sales.
InvestingPro Tips highlight Amgen's high earnings quality, with free cash flow consistently exceeding net income. This is evident in the company's Q3 2023 free cash flow of $2.5B. The company is also known for its high return on invested capital and consistently increasing earnings per share, which aligns with its revised EPS for 2023.
Amgen has a strong track record of raising its dividend for 13 consecutive years, making it a potentially good pick for income-focused investors. It's also worth noting that the stock generally trades with low price volatility, offering a relatively stable investment option.
InvestingPro has numerous additional tips available for Amgen, providing in-depth insights into the company's performance and potential. These tips can be a valuable resource for investors seeking to make informed decisions about their investments.
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