), which is currently being pursued by
), announced restructuring initiatives that will see the company
cutting its work force by 13% (1,500 employees). 250 vacant
positions will also be eliminated. Shares were up 2.23% on the
restructuring news as well as better-than-expected second quarter
results and a raised guidance.
The company stated that approximately 94% of all customer-facing
personnel will be unaffected by the restructuring.
The restructuring plan will be carried out over the rest of the
year and is expected to deliver annual pre-tax savings of
approximately $475 million in 2015. Allergan plans to streamline
its organizational structure and focus on high value opportunities.
The company plans to reduce its expenditure related to the
commercial organization, general and administrative functions,
manufacturing and the R&D organization. These reductions are
expected to have a modest impact on net sales growth. The company
has reiterated its double-digit sales growth target for the period
2014 to 2019. Allergan expects to deliver an earnings growth rate
of more than 20%.
Allergan expects 2014 earnings of $5.74-$5.80 per share. The Zacks
Consensus Estimate is currently at $5.74 per share. Allergan
estimates earnings per share in the range of $8.20-$8.40 and
approximately $10.00 in 2015 and 2016, respectively. Currently, the
Zacks Consensus Estimate for 2015 stands at $8.30 per share, within
the guided range.
At present, we expect investor focus to remain on further updates
from Valeant and Allergan on the acquisition proposal. Allergan had
rejected Valeant's revised acquisition offer.
Allergan carries a Zacks Rank #2 (Buy). Investors can also consider
) carrying the same rank as Allergan.
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ASTRAZENECA PLC (AZN): Free Stock Analysis
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