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AMAG Pharmaceuticals (AMAG) Down 3.8% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for AMAG Pharmaceuticals (AMAG - Free Report) . Shares have lost about 3.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AMAG Pharmaceuticals due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AMAG Posts Wider-Than-Expected Q3 Loss, Beats on Revenues

AMAG reported adjusted loss from continuing operations of 84 cents per share in the third quarter of 2018 (excluding a $35.9 million loss on extinguishment of debt), against earnings of $1.57 reported in the year-ago quarter. The Zacks Consensus Estimate stood at a loss of 77 cents.

Quarterly revenues came in at $122.2 million, down approximately 1.7% from $124.3 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $118 million.

Quarter in Detail

The company completed the sale of Cord Blood Registry (CBR) in August 2018. Hence, CBR's results have been excluded from the financial results. The sale of CBR will allow the company to eliminate the senior notes from its capital structure and strengthen its balance sheet as it continues to generate adjusted earnings before interest, tax, depreciation and amortization (EBITDA). The company’s long-term strategy focuses on continuing to grow and further diversify its pharmaceutical portfolio. 

Makena sales came in at $80.2 million, down 18% year over year due to supply disruptions of the Makena branded IM products along with generic competition entering the market in July of 2018.

Combined sales of Feraheme and MuGard amounted to $37.1 million, up 41% year over year.

Costs and expenses from continuing operations, including costs of product sales and services, were $141.6 million, down 62.6% from the year-ago quarter.

Discontinued Operations

As a result of the sale of CBR for $530 million in cash, CBR has been classified as discontinued operations for accounting purposes. Net income from discontinued operations in the third quarter of 2018 was $95.5 million, of which $89.6 million was the gain on the sale of the business compared with $3.7 million of net income in the year-ago period. The company paid off $475 million of high-yield debt, eliminating nearly $40 million in annual cash interest expenses.

2018 Outlook

AMAG now expects revenues for 2018 to be $470-$490 million, narrowed from its previous guidance of $450-$490 million.

Others

During the quarter the company acquired AMAG-423, an orphan drug candidate for the treatment of severe preeclampsia (previously referred to as 'Velo Option'), reaffirming its focus on delivering innovative therapies that address unmet medical needs.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -15.42% due to these changes.

VGM Scores

Currently, AMAG Pharmaceuticals has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, AMAG Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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