Allergan, Inc. (AGN) reported fourth quarter 2011 earnings of $1.00 per share, a penny above the Zacks Consensus Estimate and above the guidance range of 97-99 cents per share. While earnings increased 13.6% from the year-ago quarter, revenues increased 7.1% to $1,402.3 million. Revenues missed the Zacks Consensus Estimate of $1,408 million.
Fiscal 2011 earnings increased 15.5% from the year-ago period to $3.65 per share. Full year earnings were a penny above the Zacks Consensus Estimate and above the company’s guidance range of $3.62-$3.64 per share. Revenues for the year increased 11.0% to $5,419.1 million, in line with the Zacks Consensus Estimate.
The Quarter in Details
Specialty pharmaceuticals sales increased 8.9% to $1,158.6 million, with eye care pharmaceutical sales increasing 9.2%. Products like Lumigan and Restasis helped drive eyecare sales.
Alphagan and Combigan franchise sales increased 6.6% to $110.2 million in the reported quarter. Latisse contributed $24.6 million to fourth quarter sales, up 41.1% from the year-ago figure.
Botox sales increased 7.5% year over year to $415.3 million. Recent approvals for indications like chronic migraine and urinary continence in adults with neurological conditions helped Botox sales.
Meanwhile, Allergan’s medical devices segment posted sales of $224.2 million, down 1.0%. While breast aesthetics sales increased 2.0% to $86.4 million, facial aesthetics sales increased 12.4% to $90.9 million.
However, the obesity intervention segment continued to disappoint, with sales declining 23.0% to $46.9 million.
For 2012, Allergan expects total specialty pharmaceuticals net sales to increase to $4,710 million – $4,870 million. Sales should be driven by Botox (guidance: $1,750 million – $1,800 million), Lumigan franchise (guidance: $640 million – $670 million) and Restasis (guidance: $740 million – $770 million).
Medical devices net sales are expected in the range of $940 million – $980 million in 2012. Here performance will be driven mainly by breast aesthetics (guidance: $360 million – $380 million) and facial aesthetics (guidance: $410 million – $430 million). Obesity intervention sales are expected to decline in 2012 to approximately $170 million.
Other Details
Selling, general and administrative (SG&A) expenses increased 4.5% during the quarter to $539.6 million. Research and development (R&D) expenses amounted to $226.2 million, up 12.9%.
2012 Guidance Slightly Below Expectations
Allergan expects 2012 earnings to range from $4.13- $4.19 per share. The Zacks Consensus Estimate of $4.20 is marginally above the company’s guidance range. Allergan expects product net sales to range from $5,650- $5,850 million.
Allergan also provided guidance for the first quarter of 2012, which was well below expectations. The company expects to earn 84 – 86 cents ontotal product net sales of $1,340 million – $1,390 million. The Zacks Consensus Estimate currently stands well above the guidance range at 91 cents.
Allergan declared a fourth quarter 2011 dividend of 5 cents per share.
Recommendation
We currently have a Neutral recommendation on Allergan, which is supported by a Zacks #3 Rank (short-term Hold rating).
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