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Amgen Profit Rises; Cuts FY12 Earnings Outlook


Amgen Inc. (AMGN) Tuesday reported a five percent rise in first-quarter earnings on strong sales of its lead infection drug Neulasta and Xgeva which is used to prevent skeletal-related events. Both earnings and revenue for the quarter topped Street estimates.

Looking ahead, Amgen slashed its earnings outlook for the full year 2012, but kept its adjusted earnings and revenue estimate unchanged.

Commenting on the quarterly results, Amgen CEO Kevin Sharer said, "We delivered strong sales and earnings during the first quarter, reflecting broad strength across the portfolio."

"The pipeline is developing well and the business is in good shape to address the opportunities and challenges ahead," concluded Sharer.

Amgen's total revenue for the quarter rose 9 percent from last year. Total product sales were up 8 percent from last year, with an identical growth in both U.S. and International sales.

Total sales of its lead infection drugs Neulasta and Neupogen - meant to stimulate the production of neutrophils and fight infections - rose 9 percent from last year, mainly on a rise in average prices and an increase in Neulasta unit demand.

Sales of Xgeva, for reduction of fractures in cancer patients, totaled $153 million in the fifth quarter since its launch, amounting to a 14 percent sequential growth. Sales of rheumatoid arthritis drug Enbrel rose 7 percent from last year, due mainly on a rise in average sales price.

Meanwhile, Amgen's anemia drug recorded an 11 percent drop in sales, hurt mostly by lower unit demand in the U.S. and decrease in average sales price internationally. Epogen sales slid 17 percent, reflecting impact of changes to the label and reimbursement.

Amgen said sales of its growth-phase products during the quarter rose 22 percent from last year, mainly on global unit growth.

Thousand Oaks, California-based Amgen reported first-quarter net income of $1.18 billion or $1.48 per share, compared to $1.12 billion or $1.20 share last year.

Excluding items, adjusted earnings for the quarter were $1.29 billion or $1.61 per share, compared to $1.26 billion or $1.34 per share last year.

On average, 23 analysts polled by Thomson Reuters expected earnings of $1.45 per share for the quarter. Analysts' estimates typically exclude special items.

Amgen reported first-quarter revenue of $4.05 billion, compared to $3.7 billion last year. Twenty Wall Street analysts had a consensus revenue estimate of $3.93 billion for the quarter.

During the first quarter 2012, Amgen repurchased about 21 million shares of common stock at a total cost of $1.4 billion. The company currently has $3.6 billion remaining under its repurchase program.

Amgen now expects fiscal 2012 net earnings of $5.41 to $5.67 per share, compared to its prior outlook of $5.43 to $5.70 per share. It continues to expect adjusted earnings of $5.90 to $6.15 per share and revenue of $16.1 billion to $16.5 billion.

Street analysts currently expect earnings of $6.05 per share with revenue of $16.23 billion for 2012.

AMGN closed Tuesday at $68.63, up $0.34 or 0.50%, on a volume of 4.8 million shares on the Nasdaq.

by RTTNews Staff Writer

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