Amgen Misses First Quarter Goals as Higher Costs Cut Profit
Despite higher sales, biotech drugmaker Amgen's first-quarter profit fell 25 percent as production and research costs rose sharply. Last year's quarter also gained from a tax benefit.
The company missed Wall Street's expectations for both earnings per share and revenue, sending down its shares.
The maker of injected osteoporosis treatment Prolia said Tuesday that net income was $1.07 billion, or $1.40 per share, down from $1.43 billion, or $1.88 per share, in 2013's first quarter.
Excluding one-time items, income would have been $1.44 billion, or $1.87 per share. Analysts expected $1.94.
Revenue rose 7 percent to $4.52 billion. Analysts were expecting $4.76 billion.
Sales were led by Neulasta and Neupogen for boosting infection-fighting white blood cells, up about 3 percent to a combined $1.38 billion. Sales of immune disorder drug Enbrel, Amgen's No. 2 seller, fell 5 percent to $988 million.
Sales of six other medicines were up at least slightly. One standout was Prolia, whose sales jumped 38 percent to $196 million. Prolia is touted in TV ads by actress Blythe Danner.
"Though the company did disappoint relative to investors' expectations, it is worth mentioning that those expectations had largely ignored management's previous guidance," noted Edward Jones analyst Judson Clark. But he said results set a "discouraging tone" for Amgen.
The company, based in Thousand Oaks, Calif., noted that the 17 percent increase in research and development spending, to $1.03 billion in the quarter, was mainly due to expenses to continue the research programs of Onyx Pharmaceuticals, the cancer drug company it acquired last October.
"We're confident that we can deliver on our operational and financial targets for the year," CEO Robert Bradway told analysts during a conference call.
The company reiterated its 2014 financial forecasts, for adjusted earnings per share of $7.90 to $8.20 and revenue of $19.2 billion to $19.6 billion. Analysts surveyed by FactSet expect earnings per share of $8.15 per share on revenue of $19.62 billion.
In after-hours trading, Amgen shares slipped $3.25, or 2.7 percent, to $116.05.