Amgen Inc. reported earnings of $201M ($0.18/share) for the third quarter, down 82% from the $1.1B ($0.94/share) profit posted a year ago, as sales of its Aranesp and Epogen anemia treatments, which account for some 40% of its revenue, dropped 23% and 5%, respectively. Sales of the two drugs have been pressured by tighter Medicare reimbursement restrictions, and the company has lost some $17B in market value since studies showed high doses of Epogen and Aranesp raised the risk of heart attack and death. "We were caught in an unexpected hurricane, and we are coming out of it," said CEO Kevin Sharer. Excluding charges, the company earned $1.08/share, topping analysts' average forecast of $1.03/share. Revenue at $3.6B also came in ahead of the $3.58B average analyst estimate. The biotech giant also increased the cost estimates for the restructuring announced in August, saying it now expects charges to total $775M-$850M, up from its previous forecast of $600M-$700M. Amgen already has taken $582M of those charges and expects to incur the rest in the fourth quarter, with some carrying over into 2008. It reiterated its outlook for earnings of $4.13-$4.23/share, excluding items, for 2007.
Commentary: Amgen Announces Layoffs • Friday's Profit-Taking a Prelude to a Positive Earnings Week
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Earnings call transcript: Amgen Q3 2007 Earnings