Amgen Braces for Rising Expenses Ahead of Q3 Results—Is a Profit Squeeze Looming?
Amgen heads into Q3 earnings with a CFO transition, a management warning about surging costs, and MariTide trials burning through cash. Whether blockbuster growth from Repatha and TEZSPIRE can hold the line on profitability is the question investors need answered.
Amgen (NASDAQ:AMGN | AMGN Price Prediction) is expected to report third-quarter results on Tuesday, November 3, after the close. The stock is up 41.28% year to date, and management has already warned that spending will jump. The key question is whether revenue momentum can cover the higher costs.
Strong Momentum Meets a Spending Warning
Last quarter, Amgen posted non-GAAP EPS of $6.29 against a $5.62 consensus, its fifth consecutive beat. Revenue reached $10.05 billion, up 9.7% year over year and ahead of the $9.42 billion estimate. Full-year guidance was then raised to $38.2 billion to $39.4 billion in revenue and $22.30 to $23.50 in non-GAAP EPS.
The warning came from outgoing CFO Peter Griffith, who said on his final call that Amgen expects a “meaningful sequential increase in operating expenses in the third quarter.” That includes a $100 million upfront payment tied to a business-development deal, booked to R&D. Non-GAAP operating margin already slid 0.5 percentage points in Q2, while the tax rate rose 1.4 percentage points.
Consensus Points to Slower Profit Growth
| Metric | Consensus | Prior-Year Actual | YoY Growth |
|---|---|---|---|
| Q3 2026 Normalized EPS | $5.7876 | $5.64 | 2.6% |
| Q3 2026 Revenue | $10.08 billion | $9.56 billion | 5.4% |
| FY2026 Normalized EPS | $23.0343 | $21.84 | 5.5% |
| FY2026 Revenue | $38.97 billion | $36.74 billion | 6.1% |
Margins, MariTide and the Legacy Drag Will Decide This Quarter
The consensus math frames the squeeze. Analysts expect revenue growth of 5.4% but EPS growth of only 2.6%, and the EPS estimate sits below Q2’s $6.29. Operating margin will be the first metric to check, since management guided full-year non-GAAP margin to roughly 45% to 46% of product sales versus 48% in Q2.
R&D is the main driver. Full-year non-GAAP R&D should grow high single digits, funding 9 ongoing global Phase III MariTide trials alongside olpasiran and xaluritamig. Updates on MariTide enrollment and manufacturing expansion will be worth tracking, with capex guided to about $2.6 billion.
On the top line, Repatha ($953 million, +37%), EVENITY ($714 million, +38%) and TEZSPIRE ($486 million, +42%) must keep making up for legacy erosion. Prolia fell 32% and XGEVA 34% on biosimilar competition, Kyprolis dropped 17%, and Enbrel faces Medicare Part D price setting. IMDELLTRA, up 115%, deserves attention as it expands into Europe and China.
Leverage matters too. With $57.3 billion in debt and no buybacks in Q1 or Q2, I want to hear how Thomas Dittrich, set to succeed Griffith as CFO, frames capital allocation.
A Test of Whether Investment Can Pay for Itself
Amgen has gained 59.94% over the past year, so the bar is high. Management frames rising expenses as deliberate investment in MariTide, late-stage programs and commercial brands. If revenue holds and the raised guidance stays intact, that argument gets stronger. If margins contract faster than the 45% to 46% guide implies, the debate shifts from growth to profitability. This report will show how much of tomorrow’s pipeline today’s sales can fund.
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After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
