News Recap – Amgen, Inc. (NASDAQ:AMGN) Chubb Ltd (NYSE:CB)
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Shares of Amgen, Inc. (NASDAQ:AMGN) declined -2.76% to $175.89 on Wednesday, as the company’s better-than-forecast second-quarter earnings and raised guidance weren’t enough to overcome concerns about its future.
The stock price floated in a range of $175.20 – 178.85. The stock moved on high volume, traded at a volume of 5,446,135 shares, as compared to its average daily volume of 3.40M shares. The market capitalization for the company is reported at $129.23B.
Amgen stated adjusted earnings per share of $3.27, above FactSet expectations of $3.11, and raised its guidance to between $10.79 and $11.37 per share, above previous guidance of $10.64 to $11.32.
Wall Street wasn’t impressed — Amgen shares dropped 2.7% on Wednesday afternoon. The stock has climbed 20% this year, roughly double the gain of the S&P 500 SPX, +0.03% .
Behind an apparently strong quarter is a company that’s coasting, Wall Street analysts said.
For one, the $129 million beat “appears mostly attributed to” a $140 million build in inventory for the blockbuster anti-inflammatory product Enbrel, said Bernstein analyst Ronny Gal. “This will burn off throughout the next quarter.”
Then there are longer-term concerns. Amgen’s aging legacy product franchise,” which makes up about two-thirds of total product revenue, is going to continue to face challenges, said Raymond James analyst Christopher Raymond.
Meanwhile, new drugs “don’t have enough size to offset the flattening legacy products,” said Leerink analyst Geoffrey Porges. “The company requires new opportunities to offset the further decline of legacy products, and their late-stage pipeline looks embarassingly bare.”
Amgen referred MarketWatch to its chief executive officer’s comments on the company’s second-quarter earnings call.
“Our second quarter financial performance was enabled by strong volume-driven growth for our newer products counting Prolia, Kyprolis and Repatha, in addition to our other more recently launched drugs,” Chief Executive Robert Bradway said. “This is encouraging as we continue to believe that such volume-driven growth is a key ingredient for long-term success in this industry.” (Source: MarketWatch)
Chubb Ltd (NYSE:CB)declined -3.46 points or -2.35% at the market. The stock opened at $147.56. It reached an intraday trading high of $147.98 and closed at $143.90. The total volume traded for the day is 2,864,649, as compared to its average daily volume of 1.31M shares. Trading volume, or volume, is the number of shares or contracts that point towards the overall activity of a security or market for a given period. Trading volume is a key technical indicator an investor uses to identify momentum in a stock and confirm a trend or trend reversal. Volume gives an investor an idea of the price action of a security and whether he should buy or sell the security.
Trading volume can also signal when an investor should take profits and sell a security because of low activity. If there is no relationship between the trading volume and the price of a security, this signals weakness in the current trend and a possible reversal.
The current EPS for the company has been recorded at $10.15 and the beta value recorded by the company stands at 0.91 points.