Summary
Amgen Inc. reported solid revenue growth for the third quarter of 2020, with total revenues increasing by 12% year-over-year to $6.42 billion, driven by strong performance across several key products including Otezla, Prolia, and Repatha. Net income saw a modest increase to $2.02 billion, resulting in diluted earnings per share of $3.43. The company's balance sheet remains robust, with total assets growing to $64.6 billion and substantial cash, cash equivalents, and marketable securities totaling $12.4 billion. Amgen also continued its capital return program, repurchasing $2.3 billion in stock and paying dividends, while managing a significant debt load of approximately $34.2 billion.
Financial Highlights
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Financial Statements
Beta
| Revenue | $6.42B |
| Cost of Revenue | $1.56B |
| Gross Profit | $4.54B |
| SG&A Expenses | $1.35B |
| Operating Expenses | $3.97B |
| Operating Income | $2.45B |
| Interest Expense | $302.00M |
| Net Income | $2.02B |
| EPS (Basic) | $3.45 |
| EPS (Diluted) | $3.43 |
| Shares Outstanding (Basic) | 585.00M |
| Shares Outstanding (Diluted) | 589.00M |
Key Highlights
- 1Total revenues increased 12% year-over-year to $6.42 billion for Q3 2020.
- 2Net income rose 3% to $2.02 billion, with diluted EPS at $3.43.
- 3Product sales grew 12% year-over-year, driven by new brands like Otezla, MVASI, KANJINTI, and Repatha.
- 4The company maintained a strong liquidity position with $12.4 billion in cash, cash equivalents, and marketable securities.
- 5Amgen repurchased $2.3 billion of its common stock and paid $2.8 billion in dividends during the first nine months of 2020.
- 6Operating expenses increased 22% primarily due to acquisition and commercialization costs for Otezla.
- 7The company is actively engaged in patent litigations related to its key products, including Enbrel and Neulasta, facing biosimilar competition.
Frequently Asked Questions
Amgen reported a 12% increase in total revenues for the third quarter of 2020, reaching $6.42 billion, compared to $5.74 billion in the same period of the previous year. This growth was primarily driven by strong product sales, up 12% year-over-year.
The acquisition of Otezla in November 2019 significantly contributed to revenue growth, generating $538 million in Q3 2020 sales and $1.58 billion for the nine-month period. However, it also led to a substantial increase in operating expenses, particularly in cost of sales and selling, general, and administrative expenses, by 22% year-over-year.
Amgen stated that it has taken steps to minimize employee risk and has not experienced significant disruptions to critical business operations. While some product demand initially decreased due to patient access issues, demand has since recovered. The company is also investigating Otezla as a potential COVID-19 treatment and is monitoring for potential impacts on clinical trials and supply chains.
Amgen's capital allocation strategy focuses on optimizing its capital structure. This includes investing in strategic transactions, repaying debt, paying dividends, and repurchasing stock. During the first nine months of 2020, the company returned approximately $5.1 billion to stockholders through dividends and stock repurchases.