Sales disappoint, but tax gain lifts Amgen profit

Apr 23, 2013 by Matthew Perrone
In this Tuesday, April 20, 2010, file photo, the exterior view of Amgen Inc. offices is shown in Fremont, Calif. Amgen Inc. reports quarterly earnings Tuesday, April 23, 2013, after the market close. (AP Photo/Paul Sakuma, File)

Tax credits helped biotech giant Amgen report first-quarter earnings that beat Wall Street's expectations, but sales growth disappointed investors.

Amgen Inc. benefited from an overall tax gain of $13 million for the latest quarter, as it booked a federal research and development credit for 2012 and resolved an audit for fiscal 2007 to 2009, which cut its tax rate considerably. That compared with paying out over $200 million in income taxes in the prior-year period.

Overall drug sales rose 6 percent, driven by growth of Enbrel for psoriasis and rheumatoid arthritis and Prolia for osteoporosis. But those gains were partially offset by the continued slide of anemia drugs Aranesp and Epogen, which have faced limits on dosing and insurance payments due to safety concerns. Aranesp sales fell 10 percent to $168 million, while Epogen declined 2 percent to $435 million.

Shares fell $7.25, or 6.4 percent, to $105.51 in after-hours trading.

The company said Tuesday that its net income rose 21 percent to $1.43 billion, or $1.88 per share, from $1.18 billion, or $1.48 per share, in the prior-year period. Adjusting for one-time expenses, the company would have earned $1.96 per share, better than the $1.84 average estimate of analysts polled by FactSet.

Revenue rose 5 percent to $4.24 billion, missing analysts' average estimate of $4.37 billion. Operating expenses rose 9 percent, to $2.67 billion.

Despite continuing declines for anemia drugs, those products could get a boost in coming months after a major setback for a rival product. In late February, Affymax Inc. and Takeda Pharmaceutical Co. pulled their anemia drug Omontys off the market after several people taking it died and about 50 had severe allergic reactions.

Omontys, Aranesp and Epogen compete fiercely for patients who develop anemia while undergoing dialysis for chronic kidney disease. Those pricey drugs, injected once a week or once a month, boost the blood's production of hemoglobin, which carries oxygen throughout the body. That reduces the need for blood transfusions.

Amgen has a promising pipeline of experimental drugs, but it will be a few years until they hit the market—if they are approved. The company said it will present preliminary results from a late-stage study of its experimental drug for the skin cancer melanoma at a meeting for cancer specialists in June.

Amgen expects profit to come in toward the upper half of its adjusted earnings guidance for the year, a range of $7.05 and $7.35 per share. It maintained a revenue outlook of $17.8 billion to $18.2 billion. Analysts expect earnings of $7.21 per share on revenue of $18.05 billion, on average.

Explore further: Scientific Games strikes $3.3B deal to buy Bally

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Amgen 4Q profit drops 16 pct. on higher spending

Jan 23, 2013

Drugmaker Amgen Inc. on Wednesday posted a 16 percent drop in fourth-quarter profit, as higher costs for production, marketing, research and other items offset higher sales for many of its biologic medicines. The results ...

Amgen posts higher 2Q sales, profit to beat views

Jul 27, 2012

(AP) — Amgen Inc.'s second-quarter net income rose 8 percent as the world's largest biotech company benefited from higher sales for its top-selling drugs and a gain from selling its share of an experimental medicine.

CenturyLink 3Q net income falls as expenses rise

Nov 02, 2011

(AP) -- Phone company CenturyLink Inc. says its third-quarter net income fell as rising operating expenses related to its April acquisition of larger phone company Qwest overshadowed increased revenue.

J&J Q3 net income drops 7 percent on higher costs

Oct 16, 2012

Johnson & Johnson's third-quarter profit fell 7 percent as increased research and production costs offset higher sales for its medicines and medical devices and new revenue from its biggest acquisition ever.

Recommended for you

Scientific Games strikes $3.3B deal to buy Bally

25 minutes ago

Scientific Games plans to pay about $3.3 billion to buy Bally Technologies in a deal that would combine makers of gambling equipment ranging from slot machines to instant-win lottery games.

Tesla loss widens as it ramps up expansion plan

5 hours ago

US electric automaker Tesla Motors reported Thursday a widening loss in the past quarter amid record revenues as it ramped up plans for a giant battery plant for future vehicles.

Android grabs 85% of smartphone market

19 hours ago

Smartphones powered by the Android operating system captured 85 percent of the worldwide market in the second quarter, threatening to marginalize rival platforms, a new survey shows.

Chinese man brings gay conversion therapy lawsuit

Jul 31, 2014

(AP)—A gay Chinese man said Thursday he was suing a psychological clinic for carrying out electric shocks intended to turn him straight, as well as the search engine giant Baidu for advertising the center.

User comments : 0