Amgen (AMGN) Q3 2011 Earnings Call October 24, 2011 5:00 pm ET Executives Arvind Sood - Vice President of Investor Relations Robert A. Bradway - President, Chief Operating Officer and Director Roger M. Perlmutter - Executive Vice President of Research & Development Kevin W. Sharer - Chairman of the Board, Chief Executive Officer, Chairman of Executive Committee and Member of Equity Award Committee Jonathan M. Peacock - Chief Financial Officer and Executive Vice President Analysts Eun K. Yang - Jefferies & Company, Inc., Research Division Jim Birchenough - BMO Capital Markets U.S. Michael J. Yee - RBC Capital Markets, LLC, Research Division Robyn Karnauskas - Deutsche Bank AG, Research Division Matthew Roden - UBS Investment Bank, Research Division Mark J. Schoenebaum - ISI Group Inc., Research Division Yaron Werber - Citigroup Inc, Research Division Geoffrey C. Porges - Sanford C. Bernstein & Co., LLC., Research Division Christopher J. Raymond - Robert W. Baird & Co. Incorporated, Research Division Eric Schmidt - Cowen and Company, LLC, Research Division Joshua Schimmer - Leerink Swann LLC, Research Division Geoffrey C Meacham - JP Morgan Chase & Co, Research Division Ravi Mehrotra - Crédit Suisse AG, Research Division Maged S. Shenouda - Stifel, Nicolaus & Co., Inc., Research Division M. Ian Somaiya - Piper Jaffray Companies, Research Division Presentation Operator
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With more than 3 quarters of the year behind us, our business continues to perform well, and has good momentum as we head into the latter part of the year. We have also taken several actions so we can deliver meaningful returns to our shareholders.To discuss our results and these initiatives, I'm joined by our Chairman and CEO, Kevin Sharer, who will provide a strategic overview of our performance, followed by our CFO, Jon Peacock, who will provide additional details on our financial performance during the quarter. Our President, Bob Bradway, who was also recently elected to our Broad, will provide some additional color on how our products performed during the quarter, followed by our Head of R&D, Roger Perlmutter, who will provide an R&D update. We'll use a handful of slides for presentation today. These slides have been posted on our website, and a link was sent to you separately by e-mail. Our comments today will be governed by our Safe Harbor statement, which, in summary, says that through the course of our presentation today, we may make certain forward-looking statements, and actual results could vary materially. We will use non-GAAP financial measures to help you understand our underlying business performance and the GAAP reconciliations are provided in our press release. So with that, I would like to turn the call over to Kevin. Kevin W. Sharer Thank you, Arvind, and good afternoon, everyone. I suspect you've read the press release and have our materials, so I'd like to make some comments on the performance of the company and where we are. As you can see from our results, our business continues to perform well with revenues and EPS both up 3%. Jon and Bob will review our financial and commercial performance in a moment, but I feel like we're well on track.
We announced today that our Board has authorized a $10 billion in share repurchases. The intent of this is to accelerate meaningfully our stock repurchase program, and this reflects our confidence in our future outlook and long-term value, as well as the capital markets' interest rate very favorable conditions.In the quarter, we also announced 2 important executive personnel positions. I'm delighted that Bob has been elected to our Board of Directors, and we're also pleased that Tony Hooper has joined us from Bristol as Executive Vice President Commercial reporting to Bob. Bob's experience and insights will add real value to our Board, and Tony's many years of U.S. and international commercial experience will help drive our growth. We also announced an agreement in principle with the U.S. government to settle allegations relating to certain sales and marketing practices, which have been the subject of previous disclosures. We recognized a $780 million reserve in anticipating and finalizing the settlement, which should happen in the next 3 to 4 months. As we have approach the end of the year, I'm encouraged by the momentum and outlook for the business, leading us to raise our guidance and -- on revenues and earnings per share for 2011. Amgen is in a good place. We look forward to finishing a strong year, and I want to thank all of Amgen's staff for their exceptional efforts this year on behalf of shareholders and patients. Jon, over to you? Jonathan M. Peacock Thanks, Kevin. I'll start with a few comments in our performance in the quarter, then address balance sheet issues and our updated guidance for the year. Overall, revenues grew 3% in the quarter. Excluding ESAs, product sales grew 13%, reflecting strong growth across the portfolio, particularly on Europe franchises. Bob will comment more on our product sales in a few minutes.
Operating expenses grew by 11% compared to the third quarter of 2010. More than half of the increase was driven by the Puerto Rico excise tax for which we benefit from an offsetting foreign tax credit further down. Foreign exchange movements on our international costs and the U.S. health care reform fee.Read the rest of this transcript for free on seekingalpha.com