Amgen reports surge in earnings, sales

NEW YORK (CNNMoney.com) -- A surge in Amgen Inc's fourth-quarter earnings fell short of analyst projections, but the company's sales topped expectations.

Amgen (down $0.29 to $74.85, Charts) reported its earnings jumped 20 percent to 90 cents in the fourth quarter of 2006, excluding stock option expense and other expenses, compared to 75 cents for the same period the previous year.

The biotech reported that sales totaled $3.83 billion in the fourth quarter, a 17 percent increase compared to the year-ago period, when sales totaled $3.27 billion.

For the full year 2006, Amgen said its earnings per share increased 22 percent to $3.90 from the prior year, and sales jumped 15 percent to $14.3 billion.

Analysts had forecast a 26 percent surge in earnings per share to 95 cents and a 15 percent jump in sales to $3.76 billion, according to Thomson First Call.

Sales for the company's lead product, Aranesp, a treatment for anemia and kidney disease, shot up 27 percent to $1.1 billion in the fourth quarter, from $873 million during the fourth quarter of 2005, the company said. For the full year 2006, Aranesp sales were up 26 percent to total $4.1 billion.

Amgen had some bad news about a late-stage study in anemia patients who took Aranesp without chemotherapy. The company said that an "initial analysis" of the study showed that after 16 weeks there was an "increased risk of death" in the patients who took Aranesp. This may have contributed to a 3 percent after-hours slide in the stock price.

Amgen executives said they were still examining the study results.

Combined sales of Neulasta and Neupogen, drugs combined with chemotherapy to fight infection, rose 10 percent to slightly more than $1 billion in the fourth quarter, from $928 million during the fourth quarter the previous year.

Sales for Enbrel, a treatment for rheumatoid arthritis and other diseases, jumped 18 percent to $792 million in the fourth quarter, compared to $674 million for the same period in 2005.

Les Funtleyder, analyst for Miller Tabak, said the Enbrel sales came in stronger than he forecast, possibly because Amgen was able to charge a higher price than anticipated.

Sales for the anemia drug Epogen rose 6 percent to $661 million in the fourth quarter, from $626 million in the same period the prior year.

Shiv Kapoor, analyst for Montgomery & Co., said he was most impressed by the company's ability to keep growing, despite its size.

"EPS grew 22 percent for 2006 and that's pretty good for a company that has $14 billion in sales," said Kapoor. "So I wouldn't be discouraged by this quarter."

Amgen said it expects sales and earnings to keep growing in 2007. The company's guidance for 2007 places total sales in the range of $15.4 billion to $16 billion, with a band of $4.30 to $4.50 for adjusted EPS.

Amgen, based in Thousand Oaks, Calif., is the biggest biotech in the world in terms of annual sales. Genentech (down $0.93 to $87.46, Charts), based in South San Francisco, is the second-largest in terms of sales, and it has the largest market capitalization, of $92 billion.

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