Amgen, Inc.

Amgen, Inc. (AMGN - Analyst Report) recently raised 2008 EPS guidance after strong sales in its third-quarter. The company has surprised on estimates 4 consecutive quarters by an average of 10.68%. AMGN is trading at 11.9x forward earnings.

Company Description

Amgen manufactures human therapeutics in the areas of cancer, kidney disease, rheumatoid arthritis and other serious illnesses.

The company, a Zacks #1 Rank (strong buy), was one of the first biotechnology companies to use advances in recombinant DNA and molecular biology to manufacture medical products.

Revenue Jumps 7% in the Third Quarter

On Oct 22, Amgen reported third-quarter earnings that surprised on estimates by 14.15%. Earnings per share rose 14% to $1.23 compared to $1.08 in the year ago period. Adjusted EPS was $1.21. Analysts expected $1.06. Net income jumped 11% to $1.308 billion from $1.181 billion in the third quarter of 2007.

Revenue climbed 7% to $3.875 billion from $3.611 billion a year ago.

International sales grew 20% to $855 million from $715 million mainly on the impact of foreign currency exchange. Removing the currency impact, international sales would have increased 9%. U.S. sales rose 4% to $2.929 billion from $2.809 billion a year ago.

Amgen Raises 2008 EPS Guidance

Amgen raised its 2008 revenue and EPS guidance range after its strong third-quarter results. Revenue was increased to a range of $14.9 billion to $15.2 billion from $14.6 billion to $14.9 billion.

The EPS forecast was adjusted to a range of $4.45 - $4.55 from $4.25 - $4.45 based upon sales momentum and lower operating expenses.

Consensus Estimates for the Fourth Quarter and the Full Year Rise

Given Amgen's bullish guidance outlook, covering analysts have been raising estimates for the fourth quarter and the full year. 6 out of 9 covering analysts raised estimates in the last 7 days to an average of $1.04 from $1.02.

For the full year, consensus estimates jumped 3.5% to $4.44 per share, just below the lower end of the company's forecasted EPS range.

Value Fundamentals

Amgen has a forward P/E of 11.97. Its price-to-book is 2.92. The company has an outstanding return on equity (ROE) of 21.18%.