Oct 27, 2014 5:02 PM
Amgen beats 3Q estimates while shrinking workforce
The Associated Press
WASHINGTON (AP) Amgen said Monday that its earnings fell in the third quarter on charges from an ongoing restructuring effort, but the biotech drugmaker's adjusted results still surpassed Wall Street expectations.
The better-than-expected quarter led the Thousand Oaks, California-based company to raise its full-year earnings outlook.
Amgen earned $1.24 billion, or $1.61 per share, down from $1.37 billion, or $1.79 per share, in the prior-year period. Excluding one-time charges associated with job cuts and closing locations, the company would have earned $2.30 per share.
That surpassed Wall Street expectations, with analysts surveyed by Zacks Investment Research calling for earnings of $2.11 per share, on average.
The world's largest biotech drugmaker posted revenue growth of 6 percent to $5.03 billion in the period, also exceeding Street forecasts. Analysts expected $4.92 billion, according to Zacks.
In July Amgen announced it would lay off 12 to 15 percent of its worldwide workforce and close four sites to free up money needed for business investments, including marketing and other expenses for launching new drugs. The company said Monday it plans to cut 2,925 jobs by the end of 2015 as part of its effort to streamline operations, reduce management layers and shrink its real estate footprint.
The company's results were weighed down by $376 million in pretax restructuring costs for the quarter, and Amgen estimates it will spend $150 million on similar efforts in the fourth quarter. The company expects the total restructuring plan to result in charges between $835 million and $885 million. By 2016 Amgen estimates the changes will result in $700 million in pretax savings, which company executives plan to reinvest to support product launches.
Among its top sellers, sales of anemia drugs Neulasta and Neupogen slid 7 percent to $1.49 billion while sales of osteoporosis drug Prolia jumped 43 percent to $255 million.
Sales of the specialty cancer drug Kyprolis rose 21 percent to $94 million compared to the second quarter of 2014. Amgen acquired the drug last year as part of its $9.7 billion purchase of Onyx Pharmaceuticals. That deal was part of Amgen's strategy to expand beyond its medicines used for easing anemia and side effects of some cancer treatments and become a major player in the market for pricey cancer drugs.
Amgen is awaiting U.S. approval for its chronic heart failure medicine, ivabradine, and its advanced melanoma drug, talimogene laherparepvec. The company hasn't announced brand names for either one.
Amgen raised its adjusted earnings per share estimate to between $8.45 and $8.55 per share, up from its July forecast of $8.20 to $8.40 per share. The company now expects full-year revenue of $19.8 billion to $20 billion, up from $19.5 billion to $19.7 billion.
Analysts expect annual earnings per share of $8.40 on revenue of $19.71 billion, according to FactSet.
Amgen Inc. shares rose $1.25 to $149.45 in afterhours trading.