Allergan profit beats, lifts low end of 2012 view
(Reuters) - Allergan Inc (AGN.N) reported slightly higher-than-expected quarterly earnings, rebounding from disappointing results in the prior quarter, as sales of its Botox anti-wrinkle treatment, skin care products and breast implants increased.
The specialty drugmaker, which tends to provide conservative sales and profit forecasts and then outperform, jolted some investors and industry analysts in May with a narrow earnings miss and a disappointing outlook for the second quarter.
But shares of Allergan rose 6.2 percent to $87.19 on Wednesday as the company posted strong second-quarter results and lifted the lower end of its 2012 profit view, despite a strong dollar that bit hard into its overseas sales. Even so, it provided a cautious third-quarter earnings forecast.
"Allergan reported solid second quarter results given the continued difficult currency environment," Cowen and Co analyst Ken Cacciatore said in a research note, saying the Botox trends appear "exceedingly strong."
Allergan predicted Botox sales of up to $1.8 billion this year, representing almost one third of projected total company sales.
Company shares trade at almost 20 times Allergan's expected 2012 per share earnings, a hefty premium to most drugmakers and medical device makers. But Cacciatore said the lofty valuation is warranted because of Allergan's consistent cash flows and an underrated pipeline of experimental products "that could be massively value creating."
One is a hair loss treatment that uses the active ingredient of Latisse -- a company product used to extend length of eyelashes. Another, also in mid-stage trials, is being tested to treat macular degeneration, a leading cause of blindness.
The specialty drugmaker said second-quarter net earnings had risen to $296 million, or 96 cents per share, from $249 million, or 79 cents per share, a year earlier.
Excluding special items, the company earned $1.07 per share. Analysts on average expected $1.06, according to Thomson Reuters I/B/E/S.
Revenue rose 4.8 percent to $1.47 billion, compared with the analysts' forecast of $1.50 billion. Sales would have risen 8.7 percent if not for negative foreign exchange factors.
Sales of Botox, which is also used to treat migraine headaches and other conditions, rose 10.2 percent to $461 million in the second quarter. Skin care products rose 9.3 percent to $71 million, while breast implant sales increased 6 percent to $101 million. But sales of the Lap-Band device to treat obesity fell 24 percent to $41 million, making it the company's clear product laggard.
Allergan said it expected third quarter-earnings, excluding special items, of $1.02 to $1.04 per share -- versus Wall Street estimates of $1.06.
The company said it is aiming for full-year earnings of $4.15 to $4.19 per share, compared with its earlier view of $4.13 to $4.19. That would reflect growth of as much as 15 percent from 2011 earnings.
(Reporting by Ransdell Pierson; Editing by Gerald E. McCormick, Lisa Von Ahn and Sofina Mirza-Reid)
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