Amgen Second Quarter Earnings

Amgen (Nasdaq:AMGN) announced its results for the most recent quarter on July 26, 2012. Amgen is a biotechnology medicines company that discovers, develops, manufactures, and markets medicines for grave illnesses.

Investors care about earnings because they drive stock prices. Strong earnings generally result in the stock price moving up and vice versa. SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers: Amgen managed to exceed estimates with stronger-than-expected EPS and revenues. The company reported $1.61 per share versus the $1.51 per share estimate and revenues of $4.48 billion versus the $4.08 billion estimate. EPS rose 28.8% while revenue climbed 13.1% from the same period last year. Amgen's revenue has grown during each of the past four quarters on a year-over-year basis. Net income for the second quarter was up 8.2% to $1.27 billion.



A Look Back: Net income has dropped 12.2% year-over-year on average across the last five quarters. Performance was hurt by a 63.3% decline in the third quarter of the last fiscal year from the year-earlier quarter.

The company's cost of sales rose 13.3% from a year earlier. Last quarter, cost of sales was 15.2% of revenue, similar to the prior-year quarter.



Looking Ahead: Expectations for the company's next-quarter results are lower than they have been. Over the past 60 days, the average estimate for third quarter has fallen from $1.53 per share to $1.52. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. Over the past three months, the average estimate for the fiscal year has climbed from $5.94 per to share to $6.08.