Amgen Inc (AMGN, Financial) announced its financial results for the third quarter of 2023 on October 31, 2023. The company reported a 4% increase in total revenues to $6.9 billion, compared to the third quarter of 2022, driven by a 5% increase in product sales. Product sales growth was driven by 11% volume growth, partially offset by 3% lower net selling price and 3% unfavorable changes to estimated sales deductions.
Financial Performance
Amgen's GAAP earnings per share (EPS) decreased 19% from $3.98 to $3.22, primarily due to a net impairment charge in Q3 2023 of approximately $650 million following a decision to discontinue development of AMG 340. This was partially offset by increased revenues. GAAP operating income decreased from $2.7 billion to $2.0 billion, and GAAP operating margin decreased 11.7 percentage points to 30.9%.
Non-GAAP EPS increased 6% from $4.70 to $4.96, driven by increased revenues, partially offset by higher operating expenses. Non-GAAP operating income increased from $3.3 billion to $3.4 billion, and non-GAAP operating margin decreased 0.5 percentage points to 52.0%.
Product Sales Performance
Amgen's product sales increased 5% for the third quarter of 2023 versus the third quarter of 2022. Unit volumes grew 11%, partially offset by 3% lower net selling price and 3% unfavorable changes to estimated sales deductions. Notable growth was seen in sales of Repatha, Prolia, EVENITY, and Nplate.
Operating Expense, Operating Margin, and Tax Rate Analysis
On a GAAP basis, total operating expenses increased 22%. Cost of sales margin increased 2.1 percentage points, primarily driven by higher profit share, higher amortization expense from acquisition-related assets, and changes in product mix. Research & Development (R&D) expenses decreased 3%, while Selling, General & Administrative (SG&A) expenses increased 5%.
Cash Flow and Balance Sheet
The company generated $2.5 billion of free cash flow in the third quarter of 2023 versus $2.8 billion in the third quarter of 2022. Cash and investments totaled $34.7 billion and debt outstanding totaled $60.5 billion as of September 30, 2023.
2023 Guidance
For the full year 2023, Amgen expects total revenues in the range of $28.0 billion to $28.4 billion. On a GAAP basis, EPS is expected in the range of $11.23 to $12.73, and a tax rate in the range of 14.0% to 15.5%. On a non-GAAP basis, EPS is expected in the range of $18.20 to $18.80, and a tax rate in the range of 16.5% to 17.0%.
Explore the complete 8-K earnings release (here) from Amgen Inc for further details.