10-QPeriod: Q1 FY2010

AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 7, 2010For Securities:AMGN

Summary

Amgen Inc. reported strong financial results for the first quarter of 2010, with total revenues reaching $3.59 billion, a 8.5% increase year-over-year. Net income also saw a healthy rise to $1.17 billion, translating to diluted earnings per share of $1.18, up from $0.98 in the prior year's quarter. This growth was primarily driven by a 9% increase in product sales, reaching $3.53 billion, fueled by strong performance across key products like EPOGEN, Neulasta/NEUPOGEN, and ENBREL, as well as significant international growth. The company maintained a robust balance sheet with $14.1 billion in cash, cash equivalents, and marketable securities. However, total debt increased due to new note issuances and the current portion of convertible notes. Amgen continued its commitment to returning capital to shareholders through a significant stock repurchase program, repurchasing approximately 29 million shares in the quarter. Despite positive financial performance, the company highlighted the potential adverse impacts of the recently enacted U.S. healthcare reform law, which is expected to significantly affect future revenue and operations.

Financial Highlights

49 data points
Beta

Revenue

$3.59B

84.1% Gross Margin

Net Income

$1.17B

32.5% Net Margin

EPS (Diluted)

$1.18

Total Assets

$40.37B

Cash & Equivalents

$2.27B

Free Cash Flow

$819.00M

Financial Statements
Beta
Revenue$3.59B
Gross Profit$3.02B
SG&A Expenses$884.00M
Operating Expenses$2.11B
Operating Income$1.48B
Interest Expense$145.00M
Net Income$1.17B
EPS (Basic)$1.19
EPS (Diluted)$1.18
Shares Outstanding (Basic)982.00M
Shares Outstanding (Diluted)988.00M

Key Highlights

  • 1Total revenues increased by 8.5% to $3.59 billion compared to the prior year's quarter.
  • 2Net income rose by 14.5% to $1.17 billion, with diluted EPS improving to $1.18 from $0.98.
  • 3Product sales grew by 9% to $3.53 billion, driven by strong performance in key products and international markets.
  • 4The company maintained substantial liquidity with $14.1 billion in cash, cash equivalents, and marketable securities.
  • 5Amgen repurchased approximately 29 million shares of common stock for $1.7 billion during the quarter.
  • 6The company anticipates a significant adverse impact from the U.S. healthcare reform law enacted in March 2010.
  • 7New debt issuances totaled $1 billion, with the current portion of convertible notes increasing significantly.

Frequently Asked Questions

The primary driver of Amgen's revenue growth was a 9% increase in product sales, reaching $3.53 billion. This growth was supported by strong performance from key products such as EPOGEN, Neulasta/NEUPOGEN, and ENBREL, as well as robust international sales expansion.

While the full impact is anticipated to be more significant in future periods, the U.S. healthcare reform law, enacted in March 2010, had an estimated adverse impact of $33 million on Amgen's product sales during the first quarter of 2010 due to provisions already in effect. The company expects a substantially larger impact in the full year and anticipates it will have a material adverse effect on its business and results of operations.

Amgen maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $14.1 billion as of March 31, 2010. Approximately $12.2 billion of this amount was held in foreign tax jurisdictions and intended for use in foreign operations.

Amgen has $2.378 billion in convertible notes due in February 2011. The company believes its current funds, cash from operations, and access to financing are adequate to meet its working capital, capital expenditure, and debt service requirements, including the repayment of these notes.