Amgen profit misses Street view; sees broad tax reform benefits

(Reuters) - Amgen Inc (AMGN.O) on Thursday reported a fourth-quarter profit well below Wall Street estimates, hurt by a steep decline in sales of blockbuster rheumatoid arthritis drug Enbrel and higher-than-expected expenses, and its shares fell nearly 2 percent.

But the world’s biggest biotechnology company provided a 2018 earnings forecast range with a midpoint that easily exceeded analysts’ estimates and announced a $10 billion share repurchase program and a lower effective tax rate due to U.S. tax reform.

“The benefits of tax reform will be quite broad,” Chief Executive Robert Bradway said.

Excluding items, Amgen earned $2.89 per share, 14 cents below analysts’ average expectations, according to Thomson Reuters I/B/E/S.

For 2018, Amgen forecast adjusted earnings per share of $12.60 to $13.70 and revenue of $21.8 billion to $22.8 billion. Analysts were looking for $12.71 per share and $22.8 billion in revenue.

Wider-than-usual forecast ranges were due in part to uncertainty over Sensipar, a secondary hyperparathyroidism drug that could lose patent protection as early as March, Chief Financial Officer David Meline said.

“We’re all waiting for them to do at least a modest-size deal. They need another product or two,” said Cowen and Co analyst Eric Schmidt.

Amgen projected a 2018 adjusted tax rate of 14 percent to 15 percent. Other large drugmakers have announced rates of about 17 percent or 18 percent. AbbVie Inc (ABBV.N) surprised investors by announcing a 9 percent adjusted tax rate, rising to 13 percent over five years.

Amgen plans capital investments of about $3.5 billion over the next five years, with 75 percent in the United States. The company said it decided to build a new biomanufacturing plant in the United States and will add jobs to build and run the facility.

Revenue fell 3 percent to $5.8 billion, about in line with analysts’ expectations.

Enbrel sales fell 13 percent to $1.37 billion due to lower demand and net selling price in a highly competitive market.

Sales of infection fighter Neulasta were flat at $1.11 billion.

Prolia for osteoporosis grew 24 percent to $463 million.

The company incurred $79 million in expenses in Puerto Rico for Hurricane Maria recovery and additional incremental expenses related to tax planning.

It posted a fourth-quarter net loss of $4.26 billion, or $5.89 per share, as it took a $6.1 billion charge related to U.S. tax reform. That compared with a profit of $1.93 billion, or $2.59 per share, a year ago.

Amgen shares fell to $182.07 from a Nasdaq close at $185.56.