Amgen Warns Growth Will Slow
Amgen Inc., the world’s largest biotechnology company, on Wednesday reported a one-third jump in its quarterly profit and set plans for a stock split and a $2-billion stock buyback.
But the firm also warned of slower growth ahead.
Thousand Oaks-based Amgen said earnings rose to $300 million, or 56 cents a diluted share, in the quarter ended Sept. 30, from $221 million, or 42 cents, a year ago.
Operating earnings, before a one-time gain of 6 cents a share related to reduced liabilities, were 50 cents a share in the latest quarter.
Wall Street had expected operating earnings of 49 cents, according to First Call/Thomson Financial. But the so-called whisper estimate was 52 cents.
With results below the whisper number--and with the company’s growth warning--Amgen stock tumbled to $79.50 after hours, after rising $2.19 to $86.13 in regular Nasdaq trading.
Amgen said overall product sales increased 20% in its third quarter, to $769 million. Sales of Epogen, used by kidney dialysis patients, jumped 28% while sales of Neupogen, used by cancer and AIDS patients, rose 9%.
But in 2000, Amgen said, it expects sales and earnings growth in the low double digits, as it spends more on marketing of new drugs.
The company said it will split its stock 2-for-1 on Nov. 19 for owners of record Nov. 5. In addition, Amgen said its board authorized the repurchase of up to $2 billion of stock between now and December 2000. The company has been buying back stock since at least 1997.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Santa Monica-based video game publisher Activision Inc. reported fiscal second-quarter profit of $1.06 million, or 4 cents a share, contrasted with a loss of $2.21 million, or 10 cents, a year earlier. It was expected to earn 2 cents. Revenue rose 74% to $115.4 million.
* Oakley Inc. said it will restructure its money-losing footwear business, turning to outside manufacturers to make its shoes. The Foothill Ranch-based company, which is known for its sports-related sunglasses, ventured into the shoe business last year with an eye-catching high-top that sold so poorly it has been discontinued. Although Oakley initially said it could turn a profit making shoes at its own plant, the company said its footwear division lost $2.3 million in the first half and that it will use manufacturers outside the U.S. to make its shoes.
Oakley also reported that third-quarter net income rose 25% to $10.3 million, or 15 cents a share, from $8.2 million, or 12 cents, a year ago. Analysts had predicted earnings of 14 cents a share.
Sales rose 5.3% to a record $70.8 million but were off 3% in the U.S. The company attributed the decline to a 28% drop in sales to its largest customer, Sunglass Hut, which delayed shipments of some new Oakley styles during the key summer season until the chain could sell older styles of sunglasses. Sales to other U.S. retailers rose 10%, the company said.
Oakley shares closed at $6.50, down 50 cents in New York Stock Exchange trading.. The company announced results and the changes in its footwear division after U.S. markets closed.
* Pasadena-based mortgage lender IndyMac Mortgage Holdings Inc. reported third-quarter net income of $31.8 million, or 39 cents per share, down from $39 million, or 54 cents, a year ago. Net interest income fell to $38 million from $43 million.
* Woodland Hills-based industrial technologies firm Unova Inc. reported a drop in third-quarter profit to $9.4 million, or 17 cents per share, compared with $13.3 million, or 24 cents, a year ago. The decline was expected due to restructuring. Revenue grew 24% to a record $503.4 million.
* Newport Beach-based Conexant Systems Inc., which was spun off from Rockwell International, reported third-quarter net income of $38.0 million, or 36 cents per share, beating expectations, compared with $24.4 million, or 24 cents, a year ago. Revenue rose 19% to $452.2 million.
* EarthLink Network, the Pasadena-based Internet service provider, reported a third-quarter loss of $13.7 million, or 42 cents a share, up from $1.1 million, or 4 cents, a year earlier. That narrowly beat Wall Street’s consensus expectations of a 43-cent loss, according to First Call. Revenue jumped 80%, to $89.6 million, as the company added 231,000 new subscribers for a total of nearly 1.6 million.
EarthLink is planning to merge with Atlanta-based rival MindSpring Enterprises, which reported a third-quarter operating profit of $3.38 million, or 5 cents a share, down from $4.7 million, or 9 cents, in the year-earlier period. Analysts expected 3 cents. Revenue ballooned to $88.2 million, compared to $28.7 million a year ago.
* Western Digital, as expected, reported a third-quarter net loss of $126.9 million, or $1.32 per share, compared with a loss of $194.7 million, or $2.20, a year ago. Revenue fell to $407 million from $651 million.
