Amgen Earnings Now A Coin Toss? (AMGN)

After today’s close, we’ll be getting earnings out of biotech giant Amgen Inc.  (NASDAQ: AMGN).  It’s amazing how the company’s strong osteoporosis data has suddenly gotten the company out of the gutter and suddenly back to 52-week highs.

Analysts expect $1.02 EPS on $3.58 Billion in revenues.  For next quarter estimates are $1.04 EPS on $3.59 Billion revenues, while fiscal Dec-2008 estimates are $4.19 EPS on $14.42 Billion in revenues.

The chart has just become extremely difficult to use as any model forwhat lied ahead after th earnings now that the gap-up has taken it tonew recent highs.  Unfortunately, support and resistance levels are nowup and down probably ever dollar or so based on the intra-day tradingvolume.

Options are also trick because of the surge today that had beenpreceded by a move from $45.00 at the end of June to almost $55.00before this news pop.

We have seen at least three positive analyst calls today, so currentnumbers and "whispers" are probably going to be given higher qualitydemands than if this news pop had not yet occurred.  The stock nowtrades back above analyst target prices.

It isn’t every day that you get massively good drug data news that hasbeen highly awaited like this to come out just one business day aheadof earnings.  That makes any pre-earnings trade set-ups more thandifficult for today. 

Based on everything we are seeing, it looks like many retail andsmaller institutions are using put options at least as a partial hedgefor protection today.  After this data has saved the stock and after the company has disclosed more risks in the past over forward earnings, the argument that earnings are extremely important or are now completely irrelevant can be made just as easily on either side of the coin.

Jon C. Ogg
July 28, 2008