AMGEN INC Quarterly Report for Q1 Ended Mar 31, 2018

Summary

Amgen Inc.'s first quarter 2018 report shows robust financial performance with a notable increase in net income and diluted earnings per share compared to the prior year. Total revenues grew to $5.55 billion, driven by a 3% increase in product sales, primarily from higher unit demand, although some key products like Neulasta® and Enbrel® saw slight declines. The company also benefited from a significantly lower effective tax rate, a direct result of the U.S. Tax Cuts and Jobs Act of 2017. Operating expenses decreased, contributing to a 5% rise in operating income. Operationally, Amgen completed the acquisition of the remaining 50% of Kirin-Amgen, Inc., consolidating its operations and eliminating future royalty obligations. The company also continued its aggressive capital return program, repurchasing a substantial amount of its common stock and paying dividends. Management expressed confidence in future cash flows, supported by a strong financial position and ongoing investment in the business.

Key Highlights

• 1Total revenues increased by 2% to $5.55 billion for Q1 2018, compared to $5.46 billion in Q1 2017.
• 2Net income rose significantly by 12% to $2.31 billion, with diluted EPS growing 16% to $3.25.
• 3Product sales grew 3% to $5.34 billion, driven by higher unit demand for key products, despite a decline in Neulasta® and Enbrel® sales.
• 4Amgen acquired the remaining 50% of Kirin-Amgen, Inc. (K-A) in Q1 2018, consolidating its operations and resulting in an $80 million net gain.
• 5The effective tax rate decreased substantially to 11.8% in Q1 2018 from 15.8% in Q1 2017, largely due to the U.S. Tax Cuts and Jobs Act.
• 6The company repurchased approximately $10.7 billion of its common stock in Q1 2018, demonstrating a strong commitment to returning capital to shareholders.
• 7Cash and cash equivalents, along with marketable securities, totaled $32.17 billion as of March 31, 2018, indicating strong liquidity.

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