Drug maker Amgen Inc. said its fourth-quarter earnings fell a worse-than-expected 8.5 percent, largely due to higher production, sales and other expenses. But a 3 percent increase in revenue beat Wall Street forecasts.

After the markets closed on Thursday, the Thousand Oaks biotech giant reported net income of $934 million ($1.08 a share), compared with $1.02 billion ($1.08) in the same period a year earlier.

Revenue for the company, which develops and makes drugs to treat anemia, infections, inflammation and bone diseases rose 3 percent to $3.97 billion. The company saw growth in all product lines except for its anemia drug Aranesp, which fell 15 percent to $538 million.

Excluding one-time items, Amgen earned $1.04 billion ($1.21), a 6 percent decline. Analysts surveyed by Capital IQ on average had expected adjusted earnings of $1.22 per share on revenue of $3.92 billion.

"We exited 2011 with good momentum, and the outlook for 2012 is even stronger," said Chief Executive Kevin Sharer in a statement. Sharer is retiring in May.

Earlier in the day, Amgen announced plans to buy a cancer drug developer, Micromet Inc. for $1.16 billion in cash in an effort boost its cancer drug pipeline.

Looking forward, Amgen said it expects to earn $5.90 to $6.15 a share this year, excluding one-time items, and forecast revenue of around $16.3 billion. Analysts are expecting $5.97 a share in adjusted earnings and $16.1 billion in revenue.

Shares were up 67 cents, or 1 percent, to $68.75 in Friday midday trading on the Nasdaq.