Amgen Inc. said Tuesday that its second-quarter profit dipped 1 percent as higher spending on research, production and other items offset rising sales of its medicines.
However, the results from world's biggest biotech drugmaker soared above Wall Street expectations and it raised its profit forecast significantly. The company releases its results after the stock market closes, and despite the impressive results, Amgen's stock fell $1.80, or 1.6 percent, to $109.40 in after-hours trading. The stock gave back most of the $1.83 it gained during the regular trading session.
The maker of osteoporosis drug Prolia and Enbrel for rheumatoid arthritis and skin disorders said second-quarter net income was $1.26 billion, or $1.65 per share, down from $1.27 billion, or $1.61 per share, a year earlier.
Excluding one-time items, Amgen said adjusted net income was $1.44 billion, or $1.89 per share, well above the $1.74 analysts were expecting.
Thousand Oaks, Calif.-based Amgen said revenue rose 5 percent to $4.68 billion. Analysts surveyed by FactSet expected $4.49 billion.
"There are some questions about whether this can be done quarter in, quarter out," said Judson Clark, biotech analyst at Edward Jones.
Clark said that uncertainty might explain the drop in Amgen's stock after the results were announced, but he noted that Amgen often posts "stellar results" and they get shrugged off by investors. He said much of the earnings beat was driven by a very low tax rate, just 11.9 percent, which was partly offset by "suboptimal expense control."
Amgen noted during a conference call that operating expenses rose 8 percent in the quarter, mainly due to a 17 percent jump in research spending because multiple experimental drugs are now in the very expensive final stage of patient testing. However, production costs were up 7 percent and sales and administrative expenses rose 3 percent.
