Amgen Q2 Profit Falls On Five Prime Acquisition Related Write-off, Disputes IRS Claim On Owing $3.6B In Taxes

Amgen Inc AMGN said it received notices from the IRS looking to increase its federal tax bill by $3.6 billion, plus interest, for 2010, 2011, and 2012.
The company filed a petition in U.S. Tax Court to dispute the notices.
“We firmly believe that the IRS’s positions in the notices are without merit, and we will vigorously contest the notices through the judicial process,” Amgen said in its Q2 earnings release.
The company said that any increase to its tax bill would be reduced by up to $900 million in repatriation taxes that previously accrued to its foreign earnings.
Amgen reported a 5% increase in revenue to $6.5 billion, beating the consensus of $6.4 billion.
But its Q2 profit dropped $464 million from $1.80 billion a year earlier, driven by a $1.51 billion write-off tied to its acquisition of Five Prime Therapeutics Inc.
Adjusted EPS of $4.38 came in above the consensus of $4.06
Amgen said it had seen a gradual recovery from the first quarter inpatient visits and lab test procedures, though still below pre-pandemic levels.
“The cumulative decrease in diagnoses over the course of the pandemic has suppressed the volume of new patients starting treatment, which we expect to continue to impact our business during the second half of the year,” the company said.
Adjusted operating margin declined to 50.9% from 55% a year ago.
Guidance: Amgen reaffirmed FY21 sales guidance at $25.8 billion - $26.6 billion and adjusted EPS at $16.00-$17.00.
Price Action: AMGN shares closed at $244.08 on Tuesday.
Photo by Raimond Spekking via Wikimedia

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