Amgen Third-Quarter Profit Tops Expectations

Amgen Inc reported better-than-expected third quarter profit Monday, helped by a lower tax rate and strong sales of its products to boost white blood cells, and the company raised its full-year earnings forecast.

The world's largest biotechnology company now expects 2011 adjusted earnings of $5.15 to $5.30 per share and revenue of $15.4 billion to $15.6 billion. Its previous forecast called for earnings at the upper end of a $5.00 to $5.20 range and revenue toward the upper end of $15.1 billion to $15.5 billion.

Excluding items such as a $780 million charge to settle a probe into sales and marketing practices, Amgen had adjusted earnings of $1.40 per share, exceeding analysts' average expectations by 11 cents, according to Thomson Reuters I/B/E/S.

Amgen said if settlement discussions are successful the $780 million would resolve Federal probes and related state Medicaid claims, as well as other litigation. It expects a resolution in the next three or four months.

``Amgen handily beat third quarter EPS estimates, but much of the beat was driven by lower share count and a much lower than expected tax rate,'' ISI Group analyst Mark Schoenebaum said in a research note.

The adjusted tax rate for the quarter was 10.9 percent compared with 19.1 percent a year ago. The rate was lowered by foreign tax credits.

Amgen posted a net profit of $454 billion, or 50 cents per share, compared with a profit of $1.24 billion, or $1.28 per share, a year ago. The charge reduced net earnings by 77 cents per share.

The company also said the board authorized an increase in its share buyback program to $10 billion.

Amgen said revenue for the quarter rose 3 percent to $3.94 billion, topping Wall Street estimates of $3.87 billion.

But sales of several of its medicines were shy of analysts' expectations.

Sales of Enbrel for rheumatoid arthritis and the skin condition psoriasis rose 1 percent to $925 million, helped by a price increase. But analysts had been looking for sales of about $933 million.

Xgeva, Amgen's new drug to prevent fractures in cancer that has spread to the bones, saw sales increase to $100 million from $73 million in the prior quarter. But that was short of expectations of about $101 million to $108 million for the drug considered to be Amgen's most important future growth driver.

The related osteoporosis drug Prolia, which has had a relatively slow launch, had sales of $51 million for the quarter, up from $44 million in the second quarter, but below Wall Street estimates for about $57 million.

The white blood cell boosters Neupogen and Neulasta provided a bright spot for the quarter. Combined worldwide sales were up 6 percent to $1.34 billion, surpassing Wall Street estimates of about $1.28 billion.

``Xgeva was solid and Neupogen/Neulasta was a little bit better than expected,'' said Cowen and Co analyst Eric Schmidt.

``Those accounted for about $50 million of upside versus expectations,'' said Schmidt, adding that share buybacks also contributed to the better-than-expected earnings. (Reporting by Bill Berkrot and Deena Beasley; editing by Andre Grenon)