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Amgen Falls on 1st-Quarter Results

- By Alberto Abaterusso

Shares of Amgen (AMGN) were 0.46% lower at $178.50 in after-hours trading on Tuesday after the U.S. multinational biopharma company issued first-quarter results.

Non-GAAP earnings of $3.56 per share exceeded estimates by 8 cents. GAAP earnings of $3.18 per share were 8 cents higher than estimates, and revenue of $5.56 billion was $10 million above expectations.

Non-GAAP earnings of $2.23 billion were 10% lower year-over-year. GAAP earnings of $1.992 billion decreased 14%, and revenue was flat.

The chart below shows the trend in Amgen's total revenues over the last five first quarters:

Digging into sales from the company's key products, which total were $5.286 billion or 1% lower, indicates that arthritis treatment Enbrel rose 4% to $1.15 billion, while preventative neutropenia product Neulasta fell 12% to $1.02 billion. (Neutropenia is an abnormally low concentration of a specific class of white blood cells following chemotherapy.)

Further, Aranesp, which is used to treat anaemia caused by chemotherapy or a chronic kidney disease, was down 9% to $414 million. Prolia, which is used to treat osteoporosis in men and women who have high risk of bone fracture, was up 20% to $592 million. Xgeva, a treatment to prevent several skeletal conditions in multiple myeloma patients and others with a disseminated tumour, jumped 6% to $471 million.

For full fiscal 2019, the company forecasted revenue between $22 billion and $22.9 billion, up 0.45% from the prior $21.8 billion to $22.9 billion range. Analysts' expectations are $22.78 billion . Non-GAAP earnings are expected to be $13.25 to $14.30 per share, up from the previous $13.10 to $14.30 range. Consensus estimates are $14.1 . GAAP earnings are predicted to be $11.68 to $12.73 per share, reflecting 0.45% upside from the previous range of $11.55 to $12.75.

In addition, due to lower net income and higher sales deductions paid during the quarter to customers, the free cash flow dclined 34.6% to $1.7 billion. In the quarter, Amgen used $3 billion for the repurchase of 15.9 million common shares and allocated $900 million for dividend payments, which was 10% higher than the prior-year quarter.

Amgen closed the quarter with $26.301 billion in cash and short-term securities, a 10.2% decrease. The total debt outstanding was $33.024 billion or 2.7% lower than the last quarter of 2018.

Amgen declined 8% this year to $179.32 per share at close on Tuesday, underperforming the Nasdaq exchange-traded fund by about 10%. The stock has a market capitalization of $110.45 billion and a 52-week range of $165.22 to $210.19.

Currently, Amgen is paying a $1.45 cash quarterly dividend per common share leading to a forward dividend yield of 3.23% versus the industry median of 1.66% and compared to the S&P 500 index dividend yield of 1.87% at close on Tuesday.

Disclosure: I have no position in any listed securities.

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This article first appeared on GuruFocus.