OTTAWA (dpa-AFX) - Multi-specialty health care company Allergan, Inc. (AGN) on Monday reported a 16 percent increase in profit for the second quarter from last year on double-digit revenue growth, including higher sales of its anti-wrinkle treatment Botox.
Both quarterly revenues and adjusted earnings per share topped analysts' expectations. In addition, the company raised its financial outlook for fiscal 2014.
As part of a restructuring, Allergan will cut its workforce by about 1,500 employees or about 13 percent of its current global headcount, and eliminate an additional approximately 250 vacant positions.
Net earnings attributable to Irvine, California-based Allergan for the second quarter were $417.2 million or $1.37 per share, up from $359.9 million or $1.19 per share in the prior-year quarter. The latest quarter's results include, among others, costs associated with Allergan's consideration and rejection of an unsolicited takeover proposal from Valeant of $0.07 per share.
Excluding items, adjusted net income for the latest quarter was $459.1 million or $1.51 per share, compared to $368.6 million or $1.22 per share in the year-ago quarter. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.44 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 13 percent to $1.86 billion from $1.60 billion in the same quarter last year, and beat analysts' consensus estimate of $1.77 billion.
Allergan's total product net sales for the quarter also increased 15.9 percent, or 16.3 percent on a constant currency basis, from the year-ago quarter to $1.83 billion.
Domestic sales accounted for 61.9 percent of the product sales, and international sales accounted for the remaining 38.1 percent.
Specialty pharmaceuticals net sales for the quarter increased 13.2 percent, or 13.7 percent on a constant currency basis, to $1.53 billion.
Sales of anti-wrinkle treatment Botox/Neuromodulator sales grew 12.9 percent, while eye-care pharmaceuticals sales increased 14.5 percent, and skin care and other sales advanced 6.6 percent.
Total core medical devices net sales grew 25.8 percent, or 26.1 percent on a constant currency basis, to $288.5 million.
Allergan said its board of directors declared a second-quarter dividend of $0.05 per share, payable on September 5 to stockholders of record on August 15, 2014.
Looking ahead to the third quarter, Allergan forecasts adjusted earnings in a range of $1.44 to $1.47 per share and total product net sales between $1.675 billion and $1.750 billion, excluding any future anticipated revenue from the transition services agreements related to the sale of the obesity intervention business.
Analysts expect the company to earn $1.45 per share for the quarter on revenues of $1.72 billion.
For fiscal 2014, Allergan now forecasts adjusted earnings in a range of $5.74 to $5.80 per share and total product net sales between $6.90 billion and $7.05 billion, excluding any future anticipated revenue from the transition services agreements related to the sale of the obesity intervention business.
Earlier, the company forecast full-year earnings in a range of $5.64 to $5.73 per share, and total product net sales between $6.775 billion and $7.000 billion, excluding the sale of the obesity intervention business.
Street is currently looking for earnings of $5.70 per share for the year on revenues of $6.98 billion.
Allergan estimates 2015 earnings between $8.20 and $8.40 per share and earnings for 2016 of about $10.00 per share.
Allergan said it will execute a restructuring in the remainder of 2014 that it expects will deliver annual pre-tax savings of about $475 million in calendar year 2015 as compared to previously communicated 2015 expectations. About 94 percent of all customer-facing personnel will be unaffected by the restructuring and it will continue all pharmaceutical research and development programs in the clinic.
Allergan currently expects to incur total non-recurring pre-tax charges of between $375 million and $425 million in connection with the restructuring and other costs, including a non-cash charge of $65 million to $75 million related to the acceleration of previously unrecognized share-based compensation costs and other non-cash accounting adjustments.
The company noted that the non-recurring charges will be incurred beginning in the third quarter of 2014 and are expected to continue through the second quarter of 2015.
Allergan reaffirmed its outlook for double digit sales growth across the strategic plan period from 2014 through 2019 that is also expected to deliver a compounded annual growth rate of greater than 20 percent earnings per share growth.
AGN closed Friday's trading at $167.40. In Monday's pre-market trades, the stock is up $0.68 or 0.41 percent to $168.08.
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