Hot Pharma stock to watch: Amgen, Inc. (NASDAQ: AMGN)

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Amgen, Inc. (NASDAQ: AMGN) stock rose over 38.8% in the last one year (as of May 11th, 2020; Source: Google finance) due to better investors sentiment on Pharma stocks. The stock is currently trading at near 52 highs, and the earnings outcome was also positive.

During Q1 2020, the company had generated free cash flow of $2 billion compared to $1.7 billion in Q1 2019.  Cash and investments were of total $8 billion at the end of Q1 2020, which reflects a decrease of $18.3 billion from the end of Q1 2019. This decrease was mainly due to the Otezla and BeiGene transaction, cash return to shareholders and net debt repayments partially offset by free cash flow generated during the period.

In Q2 2020, the company plans to make $1.75 billion payment in debt payment. Debt outstanding at the end of the quarter was of total $31.8 billion. The company had issued $5 billion of long-term debt in February in order to take advantage of market conditions for refinancing the long-term debt maturities in 2020 and partially those in 2021.

AMGN in the first quarter of FY 20 has reported the adjusted earnings per share of $4.17, beating the analysts’ estimates for the adjusted earnings per share of $3.70, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 11 percent to $6.2 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $6.01 billion.

In Q1 2020, the company had returned a total of $1.9 billion to shareholders through dividend payments totaling over $900 million, and more than $900 million to repurchase 4.3 million shares at an average price of $219 per share. For the remainder of the year, the company plans to maintain the quarterly dividend of $1.60 per share, and will execute opportunistic share repurchases that will result in an amount at the lower end of the previous guidance of $3 billion to $5 billion for 2020.

The company has reaffirmed the guidance and the revenue is expected to be in a range of $25.0 billion to $25.6 billion and a non-GAAP EPS range is expected to be in the range of $14.85 to $15.60. The company is now guiding to capital expenditures to be of $600 million compared to the prior guidance of $700 million.

Meanwhile, during the first quarter, the company posted 8% rise in research and development expenses to $927 million due to higher spending on Otezla and AMG 510 partially offset by cost recoveries from the collaboration with BeiGene.

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