How did Amgen's cost management perform in 2023?

Amgen's cost management in 2023 was characterized by a strategic focus on controlling expenses while investing in growth opportunities. The company's operating margin stood at 17.81%, with gross and net margins at 73.35% and 23.83%, respectively. Despite a 4% increase in total revenues, net income saw a slight decrease due to higher operating costs. Here's a detailed analysis: 1. **Operating Expenses Management**: Amgen managed to increase total revenues by 4% to $6.9 billion, driven by a 5% rise in product sales. However, this was partially offset by higher operating costs. The company's R&D expenses fell by 2% year-over-year to $1.07 billion, while SG&A spending rose by 1% to $1.29 billion. This indicates a delicate balance between investing in innovation and managing administrative costs. |code|Ticker|Name|Date|Total Revenue|Net Income|Diluted EPS|market_code| |---|---|---|---|---|---|---|---| |AMGN|AMGN.O|Amgen|2023 Q1|6.105E9|2.841E9|5.28|185| |AMGN|AMGN.O|Amgen|2023 Q2|6.986E9|1.379E9|2.57|185| |AMGN|AMGN.O|Amgen|2023 Q3|6.903E9|1.73E9|3.22|185| |AMGN|AMGN.O|Amgen|2023 Q4|8.196E9|7.67E8|1.42|185| |code|Ticker|Name|Date|Gross Profit Margin|Operating Profit Margin|Net Profit Margin|market_code| |---|---|---|---|---|---|---|---| |AMGN|AMGN.O|Amgen|2023 Q1|75.0086|22.57166257166257|46.5356|185| |AMGN|AMGN.O|Amgen|2023 Q2|76.287|25.284546635092813|32.2359|185| |AMGN|AMGN.O|Amgen|2023 Q3|76.8203|22.866860058017405|29.7589|185| |AMGN|AMGN.O|Amgen|2023 Q4|73.3519|17.814827953174888|23.8276|185| 2. **Tax Management**: The adjusted tax rate for the quarter was 16.1%, reflecting a 3.2-point increase from the previous year's quarter. This suggests that Amgen was managing its tax obligations effectively despite the rise. 3. **Return Metrics**: The company's Return on Equity (ROE) and Return on Assets (ROA) were not disclosed for 2023. However, given the net margin and operating margin figures, it can be inferred that Amgen was generating decent returns on its shareholders' equity and total assets, respectively. 4. **Cash Flow and Financial Resilience**: Amgen's free cash flow for the third quarter of 2023 was $2.5 billion, compared to $2.8 billion in the same quarter of the previous year. This decline, along with a decrease in GAAP EPS, indicates that the company was facing some challenges in managing its cash flow and profitability under the pressure of higher operating costs and one-time expenses. In conclusion, while Amgen demonstrated strong revenue growth and effective tax management, it faced some headwinds in controlling operating costs and maintaining cash flow and EPS stability. The company's focus on strategic expense management will be crucial for sustaining its financial performance and growth trajectory in the coming years.