Amgen profit jumps on strong product sales, tops estimates

Benefitting from broad-based growth in product sales and lower tax rate, Amgen’s (AMGN) first-quarter earnings increased from last year and came in above forecast. The impressive results come at a time when the drug industry is facing pricing pressure from a new government regulation.

Following the announcement, shares of the biotech company gained modestly in the afterhours, paring a part of the loss they suffered during the regular session.

First quarter profit climbed 16% year-on-year to $3.25 per share, driven by double-digit sales growth across all product categories and a decline in tax rate. Earnings, excluding one-time items, advanced 10% to $3.47 per share.

Helped by the strong product sales, revenues increased 1.6% to $5.55 billion during the three-month period, surpassing market expectations.

“Amgen’s strong first-quarter performance was driven by our new and recently launched products, all of which delivered double-digit, volume-driven growth,” said Amgen CEO Robert Bradway.

Looking ahead, the Thousand Oaks, California-based company revised its EPS outlook for fiscal 2018 to the range of $11.30 to $12.28. Full-year adjusted earnings are currently expected to be between $12.80 per share and $13.70 per share. The revenue outlook was revised to $21.9 billion to $22.8 billion. The mid-point of the guidance is below analysts’ projection.

Helped by the strong product sales, revenues increased 1.6% to $5.55 billion during the three-month period, surpassing market expectations.

Quarterly results published by leading biotech and drug firms recently indicate the sector is emerging from a period of volatility, owing to the market pressure induced by the trade war concerns.  Of late, a sector-wide squeeze on product prices has resulted in the pharma index of S&P 500 falling around 5% since the beginning of the year.

Amgen’s competitor Johnson & Johnson (JNJ) last week reported a 13% rise in first-quarter adjusted earnings to $2.06 per share. The core earnings of Novartis (NVS) climbed to $1.28 per share in the first quarter from $1.13 per share a year earlier. Results of both J&J and Novartis topped estimates. Merck & Company (MRK) will be publishing its first-quarter results on May 1.