At the J.P. Morgan (JPM) 33rd annual healthcare conference, Amgen (AMGN) said that it is maintaining its 2015 revenue guidance, provided in October last year, of $20.8 billion to $21.3 billion. Revenues, as per the Zacks Consensus Estimate, currently stand toward the lower end of the company’s guidance at $20.9 billion.
The company also maintained its 2015 adjusted earnings per share guidance in the range of $9.05–$9.40. The Zacks Consensus Estimate is currently toward the higher end of the company’s guidance at $9.36 per share.
For 2014, the company expects to earn $8.45–$8.55 per share on total revenues of $19.8–$20 billion. 2014 earnings per share and revenues as per the Zacks Consensus Estimate currently stands at $8.59 and $19.9 billion respectively.
Amgen intends to launch multiple products in major markets in 2015 following approval. These include evolocumab (dyslipidemia), Neulasta (oncology, already launched), Kyprolis (multiple myeloma, already launched), ivabradine (chronic heart failure), talimogene laherparepvec (regionally or distantly metastatic melanoma) and Blincyto (relapsed/refractory B-precursor acute lymphocytic leukemia). Amgen also has several late-stage candidates in its pipeline with data readouts in 2015.
As far as share buybacks are concerned, the company still believes that it will return more than 60% of adjusted net income to its stockholders through 2018. The company intends to increase its dividend by 30% in the first quarter of 2015 and plans to repurchase approximately $2 billion of shares through this year.
Also, the company still believes that it will improve adjusted operating margin to 52% to 54% by 2018.
Our Take
We believe that Amgen’s guidance for 2015 is achievable. We are also pleased by the company’s cost reduction strategies and share repurchase programs.
Amgen is a Zacks Rank #1 (Strong Buy) stock. Some equally well-ranked stocks in the health care sector include Affymetrix Inc. (AFFX) and AMAG Pharmaceuticals, Inc. (AMAG).
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