Amgen Inc. (Amgen), an in vitro diagnostics company, has reported total revenues of $3.31 billion for the first quarter of 2009, down 8%, compared with the total revenues of $3.61 billion in the year-ago quarter. It has also reported net income of $1.02 billion, or $0.98 per diluted share, for the first quarter of 2009, compared with the net income of $1.10 billion, or $1.01 per diluted share, in the year-ago quarter.
2009 Guidance Update
Looking ahead for fiscal 2009, Amgen projects revenue outlook to a range of $14.4 billion to $14.8 billion from its prior estimate of $14.8 billion to $15.2 billion. Amgen continues to expect 2009 adjusted EPS to be in the range of $4.55 to $4.75 and capital expenditures to be about $650 million, down from the previous estimate of about $700 million.
Operating Expense Analysis on an Adjusted Basis:
Cost of sales decreased 13% to $474 million in the first quarter of 2009 versus $542 million in the first quarter of 2008. This decrease was primarily driven by lower sales volume and favorable product mix.
Research & Development (R&D) expenses were $605 million in the first quarter of 2009 versus $661 million in the first quarter of 2008, a decrease of 8%.
Selling, General & Administrative (SG&A) expenses decreased 10% to $774 million in the first quarter of 2009 versus $862 million in the first quarter of 2008 reflecting lower expenses associated with the Wyeth profit share related to lower ENBREL sales, lower litigation expenses, lower enterprise resource planning (ERP) system related expenses following the implementation of a new ERP system, and lower staff related expenses, partially offset by higher product promotional expenses. Excluding Wyeth profit share, SG&A expenses decreased 6% versus the first quarter of 2008.
The adjusted tax rate in the first quarter of 2009 was 21.5% compared with 22.4% in the first quarter of 2008.
During the first quarter of 2009, Amgen repurchased about 38 million shares of its common stock at a total cost of $2 billion. The company currently has $2.2 billion remaining under its authorized stock repurchase program.
Average diluted shares for adjusted EPS in the first quarter of 2009 were 1,037 million versus 1,091 million in the first quarter of 2008.
Capital expenditures for the first quarter of 2009 were about $117 million versus $170 million in the first quarter of 2008. Worldwide cash and marketable securities were $10.4 billion and adjusted outstanding debt was $12.2 billion at the end of the first quarter of 2009. The company’s adjusted outstanding debt excludes the impact of adopting FSP APB 14-1 on the carrying values of its convertible debt. The company’s outstanding debt presented in accordance with GAAP was $11.4 billion at the end of the first quarter of 2009.
“Our first quarter sales were affected by the continued deterioration of the global economy which has led to changes in patient and physician behavior,” said Kevin Sharer, chairman and chief executive officer. “Our future prospects remain strong. We have made progress on our plans to commercialize denosumab for PMO. Also, we are looking forward to reviewing important data on pipeline products including denosumab in certain oncology indications and Vectibix in colorectal cancer,” concluded Sharer.