Amgen Inc. reported its long-awaited first-quarter results onThursday after the market closed, with earnings per share(EPS) of 61 cents (see earnings, Page 4).
This was right on target with Wall Street's estimates of about60 cents per share, but above what the Thousand Oaks, Calif.,company predicted on Feb. 24, when it warned that first-quarter earnings would fall substantially below that figure --by 10 percent to 15 percent.
That pronouncement hammered the stock (NASDAQ:AMGN),which lost $9.25 a share the following day to close at $37.About 22 million of the company's 147 million sharesoutstanding changed hands. In comparison, Amgen's stockended 1992 at $70.62 per share.
Amgen's net income for the first quarter was $89.3 million,which includes a one-time benefit of $8.7 million -- or 6 centsper share -- that reflects changes in accounting standards thatrevise the criteria for recognizing deferred tax assets, thecompany said. Without the accounting change, the net incomewould have been $80.6 million, and EPS would have been 55cents.
Sales of Neupogen, the company's granulocyte-colonystimulating factor (G-CSF) for reducing the incidence ofinfection in chemotherapy that lowers white blood cell counts,also exceeded Amgen's February prediction. Neupogen accountsfor roughly 40 percent of the company's revenues.
Since the February announcement, "Neupogen sales havereturned to levels consistent with the company's long-termexpectations," said Lowell Sears, Amgen's acting chief financialofficer. In fact, for the first quarter, Neupogen sales worldwidewere $158.5 million, up 58 percent from the same period lastyear, according to the company.
Gregory Brown, an analyst who follows Amgen for VectorSecurities International Inc., commented that the first quarterdata came in "where we had expected it. ... In the short termthey set up a target and beat it." Brown and Peter Drake,Vector's executive vice president, have maintained their"neutral" rating on the company.
Analyst Joyce Lonergan said Cowen & Co. also kept its neutralrating on Amgen.
"They're still moving in a manner I would call deliberate ratherthan aggressive" regarding seeking additional label indicationsfor Neupogen, Brown told BioWorld. "They do have asubstantial share of the primary market, but if they don't getfollow-on applications soon, a slowing in sales is inevitable," hesaid.
Brown told BioWorld that Amgen's domestic sales for Neupogenin the first quarter were $119.2 million, compared with thecompany's estimates of $105 million.
Amgen's stock closed unchanged Thursday at $39.25 a share.
-- Jennifer Van Brunt Senior Editor
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