10-QPeriod: Q3 FY2018

AbbVie Inc. Quarterly Report for Q3 Ended Sep 30, 2018

Filed November 7, 2018For Securities:ABBV

Summary

AbbVie Inc. reported strong financial performance for the nine months ended September 29, 2018, with net revenues reaching $24.4 billion, a significant increase driven by the continued success of HUMIRA and growth in IMBRUVICA and the HCV product MAVYRET. Operating earnings were $8.8 billion, and diluted earnings per share stood at $4.79. The company generated substantial operating cash flow of $10.0 billion, underscoring its operational strength. Key financial activities during the period included a substantial $10 billion stock repurchase program, reflecting a commitment to returning capital to shareholders, and increased dividend payments. AbbVie also strategically managed its debt, issuing $6 billion in senior notes and using proceeds to repay existing debt. The company's pipeline remains robust with over 60 compounds in clinical development, focusing on immunology, oncology, and neurology, demonstrating a continued commitment to innovation and future growth.

Financial Highlights

52 data points
Beta

Revenue

$8.24B

77.7% Gross Margin

Net Income

$2.75B

33.4% Net Margin

EPS (Diluted)

$1.81

Total Assets

$66.16B

Cash & Equivalents

$8.02B

Free Cash Flow

$4.24B

Financial Statements
Beta
Revenue$8.24B
Cost of Revenue$1.83B
Gross Profit$6.40B
SG&A Expenses$1.92B
Operating Expenses$5.08B
Operating Income$3.16B
Interest Expense$339.00M
Net Income$2.75B
EPS (Basic)$1.81
EPS (Diluted)$1.81
Shares Outstanding (Basic)1.51B
Shares Outstanding (Diluted)1.51B

Key Highlights

  • 1AbbVie reported a 19.4% increase in total net revenues to $24.4 billion for the nine months ended September 29, 2018, compared to the prior year period.
  • 2HUMIRA remained a top performer, with total net revenues of $15.0 billion for the nine months ended September 29, 2018, showing a 11.0% increase on a constant currency basis.
  • 3IMBRUVICA demonstrated significant growth, with global revenues increasing by 38.5% to $2.58 billion for the nine months ended September 29, 2018.
  • 4The company generated $10.0 billion in cash flow from operating activities for the nine months ended September 29, 2018, a notable increase from the prior year.
  • 5AbbVie actively returned capital to shareholders, repurchasing approximately $8.5 billion of its stock under a new $10 billion authorization during the nine months ended September 29, 2018.
  • 6The company's research and development expenses increased by 7% to $3.8 billion for the nine months ended September 29, 2018, reflecting continued investment in its pipeline.
  • 7AbbVie ended the period with $8.0 billion in cash and equivalents, indicating a healthy liquidity position.

Frequently Asked Questions

The primary drivers of AbbVie's revenue growth for the nine months ended September 29, 2018, were the continued strength of HUMIRA and significant revenue growth from IMBRUVICA and the Hepatitis C (HCV) product MAVYRET. These key products demonstrated robust performance across various indications and geographies.

AbbVie is actively managing its capital structure through debt management, including the issuance of $6.0 billion in senior notes and the repayment of $3.0 billion in senior notes. The company is also strongly committed to returning value to shareholders through significant share repurchases, having bought back $8.5 billion in stock under a $10 billion program, and by increasing its quarterly cash dividend.

AbbVie maintains a strong focus on innovation, with over 60 compounds in clinical development across key therapeutic areas like immunology, oncology, and neurology. The company's significant investment in R&D, with expenses rising to $3.8 billion for the nine months, underscores its commitment to advancing its pipeline and introducing new therapies to address complex diseases, positioning it for sustained future growth.

The Tax Cuts and Jobs Act, enacted in December 2017, significantly impacted AbbVie's financial results, primarily by lowering the U.S. federal corporate tax rate to 21%. This led to a substantial decrease in effective tax rates for the period. While the company recorded provisional estimates for tax effects in 2017, it continued to evaluate the full implications in 2018.