This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Amgen Pleases the Street -- but Will Layoffs Keep Critics at Bay?

NEW YORK (TheStreet) -- Amgen, (AMGN - Get Report) the sprawling biotechnology company, pleased investors with higher profits and big layoffs yesterday, but its moves will not quiet those who want a more basic restructuring.

The maker of the osteoporosis drug Prolia said it will cut employment by 2,400, moving much of its research to Cambridge, Mass., and South San Francisco, Calif., from its headquarters offices in Thousand Oaks, Calif., and boosting production in Ireland at the expense of plants in Colorado and Seattle, Wash

Amgen shares were up $5.69 per share in overnight trading. As of 10:45 a.m., shares rose 4.8% over Tuesday's close to $129.20.

Read More: Alaska Air Counters Delta Assault With Secret Weapon: Unified Employees

Amgen chose to announce the layoffs after delivering quarterly earnings of $1.55 billion, or $2.01 per share, on $5.2 billion in revenue, up from last year's earnings of $1.26 billion, or $1.65 per share, and revenue of $4.89 billion.

All these figures beat consensus estimates. Plus, TheStreet Ratings considers Amgen a "buy."

Amgen acquired its Ireland plant in 2011 from Pfizer (PFE), and acquired its Washington state facilities with the purchase of Immunex in 2002. The South San Francisco research facilities came with last year's purchase of Onyx Pharmaceuticals

Amgen will now focus more of its research effort on the Onyx pipeline of cancer drugs

Read More: Here's Why Twitter Is Surging In One Chart

But analysts like Geoffrey Poydras of AllianceBernstein have been calling for a larger restructuring, pointing to Amgen's high research costs, scattered pipeline of new drugs and aging product line

Poydras' reaction to the layoff news was to call it "less of a restructuring and more of a re-allocation! Unlikely that this will appease dissatisfied investors who are looking for real savings, not just moving things around." Poydras in the past has suggested that Amgen split itself into two companies, one focused on exploiting existing drugs for dividends and the other focused on research

The moves are unlikely to quiet the chatter surrounding Amgen, which have in the past included rumors it would merge with AstraZeneca (AZN)  or make some other moves aimed at lowering its tax exposure.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
AMGN $159.85 -2.71%
AAPL $124.94 -1.10%
FB $82.63 -0.68%
GOOG $548.00 -0.73%
TSLA $188.50 -1.10%


DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs