10-QPeriod: Q2 FY2017

AMGEN INC Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 26, 2017For Securities:AMGN

Summary

Amgen Inc. reported solid financial results for the second quarter and first half of 2017, demonstrating revenue growth and significant improvements in profitability. Total revenues for the three months ended June 30, 2017, increased by 2% to $5.81 billion, while net income saw a substantial 15% increase to $2.15 billion, translating to a diluted EPS of $2.91, up 18% from the prior year. The company's performance was driven by strong sales from key products such as Prolia®, Sensipar®/Mimpara®, Repatha®, and KYPROLIS®, which helped offset declines in established products like Enbrel® and Neulasta®. Operating expenses were well-managed, decreasing by 6% for the quarter due to efficiency improvements and the expiration of residual royalty payments. This operational efficiency contributed to a 13% increase in operating income. Amgen continues to focus on returning capital to shareholders, with significant stock repurchases and dividend payments, while maintaining a robust cash position.

Financial Highlights

55 data points
Beta

Revenue

$5.81B

78.3% Gross Margin

Net Income

$2.15B

37.0% Net Margin

EPS (Diluted)

$2.91

Total Assets

$79.59B

Cash & Equivalents

$2.63B

Free Cash Flow

$2.14B

Financial Statements
Beta
Revenue$5.81B
Cost of Revenue$1.02B
Gross Profit$4.55B
SG&A Expenses$1.21B
Operating Expenses$3.11B
Operating Income$2.70B
Interest Expense$321.00M
Net Income$2.15B
EPS (Basic)$2.93
EPS (Diluted)$2.91
Shares Outstanding (Basic)734.00M
Shares Outstanding (Diluted)738.00M

Key Highlights

  • 1Total revenues for Q2 2017 grew 2% year-over-year to $5.81 billion, driven by strong performance in key therapeutic areas.
  • 2Net income increased by a significant 15% to $2.15 billion for Q2 2017, demonstrating improved profitability.
  • 3Diluted EPS rose 18% to $2.91 for Q2 2017, reflecting the strong net income growth.
  • 4Key products like Prolia® (+15% QoQ), Sensipar®/Mimpara® (+10% QoQ), Repatha® (+200% QoQ), and KYPROLIS® (+2% QoQ) showed robust sales growth.
  • 5Operating expenses decreased by 6% in Q2 2017 due to cost management initiatives and the expiration of royalty payments, leading to a 13% increase in operating income.
  • 6Amgen returned $1.6 billion to shareholders through stock repurchases and paid $1.7 billion in dividends in the first half of 2017, underscoring a commitment to shareholder value.
  • 7The company reported strong cash flow from operations of $4.71 billion for the first half of 2017, providing ample liquidity.

Frequently Asked Questions

Amgen reported total revenues of $5.81 billion for the three months ended June 30, 2017, a 2% increase compared to the same period in the prior year. Net income for the quarter rose significantly by 15% to $2.15 billion, resulting in a diluted EPS of $2.91, up 18% year-over-year.

The primary drivers of revenue growth in the second quarter of 2017 were strong sales performances from Prolia® (up 15%), Sensipar®/Mimpara® (up 10%), Repatha® (which saw a substantial increase of over 100% from a smaller base), and KYPROLIS® (up 2%). These products helped offset declines in sales from Enbrel® and Neulasta®.

Amgen successfully reduced its operating expenses by 6% in the second quarter of 2017. This decrease was attributed to ongoing transformation and process improvement efforts, manufacturing efficiencies, and the expiration of Enbrel® residual royalty payments. The effective management of expenses contributed to a 13% increase in operating income.

Amgen remains committed to returning capital to shareholders through dividends and stock repurchases. In the first half of 2017, the company repurchased $1.6 billion of its stock and paid $1.7 billion in dividends. A significant amount, $2.5 billion, remained available under the existing stock repurchase program as of June 30, 2017.