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By Ryan Flinn
SAN FRANCISCO - Amgen Inc., which has a production facility in West Greenwich, reported first-quarter profit that beat analyst estimates because of a research tax credit.
Net income increased 21 percent to $1.4 billion, or $1.88 a share, from $1.18 billion, or $1.48 a share, a year earlier, the Thousand Oaks, Calif.-based company said today in a statement. Earnings, excluding some items, of $1.96 a share topped by 12 cents the average of 20 analysts’ estimates compiled by Bloomberg. Revenue rose 5 percent to $4.24 billion.
Amgen rose 19 percent during the first quarter, its best three-month gain since the third quarter of 2008. The company is benefiting from investor interest in the sector, with drugmakers, health insurers and biotechnology companies in the Standard & Poor’s 500 Index returning 20 percent this year, the most among the 10 main groups.
“It’s really hard to find really great growth names in the market today,” Michael Yee, an analyst with RBC Capital Markets in San Francisco, said in an interview before the earnings were released. “Amgen is a diversified biotech with much less clinical and regulatory risk than its competitors yet continues to grow earnings by at least 10 percent and it’s going to grow the dividend by 30 percent.”
The company benefited in the first quarter from a 2012 U.S. research tax credit that wasn’t renewed until January. The company said it expects 2013 profit “to be above the mid- point” of its previous forecast of earnings excluding one-time items of $7.05 to $7.35.
Amgen is looking for new products and acquisitions as its former core anemia business declines. Eight late-stage medicines in development will generate data through 2016 and some may lead to billions of dollars in sales, Chief Executive Officer Robert Bradway said in February at a business review meeting in New York.
One, a heart medication called AMG-145, targets the cholesterol-regulating gene PCSK9 in the liver. Another therapy, romosozumab, grows bone for patients with osteoporosis.
Last year, the company agreed to buy gene researcher DeCode Genetics Inc. for $415 million and gained an experimental leukemia treatment by acquiring Micromet Inc. for $1.16 billion. Amgen also signed a development deal with London-based AstraZeneca Plc and boosted its presence in the cancer market with Xgeva, a bone drug that reduces fractures.