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Specialty-drug giant Allergan ( AGN ) reported a mixed first quarter, affirmed guidance and announced a massive share buyback Tuesday, lifting its battered stock. Allergan stock was already boosted 6% Monday after Teva Pharmaceutical Industries ( TEVA ) said in its Q1 report that its buyout of Allergan’s generics unit, Actavis, is on track to close next month after having been delayed by various regulatory issues. This would render moot the worries over generic-drug pricing that drove the stock to a two-year low on Friday, after it had already been hammered by the break-up of its merger with Pfizer ( PFE ). The stock was up another 5.5% in early trading on the stock market today as Allergan reported operating earnings of $3.04 a share, up 15% from the year-earlier quarter and beating analysts’ consensus by 4 cents, according to Thomson Reuters. Sales climbed 48% to $3.8 billion, about $150 million below Wall Street’s average estimate. Allergan affirmed full-year revenue guidance of $17 billion vs. $15.1 billion last year. All the above numbers exclude Actavis. The company said it will use part of the roughly $40 billion in proceeds from the Teva deal to buy back stock. It plans to buy $4 billion to $5 billion over the next four to six months, and said if conditions allow it will consider extending the program up to as much as $10 billion. Allergan stock, once a resident of the IBD 50, still holds an excellent EPS Rank of 97 and actually declined less than the group as a whole during the drug-stock sell-off between August and February. But the high-profile dissolution of the Pfizer deal in early April pushed the stock down to single-digit Relative Strength Ratings, leading to a mediocre Composite Rating of 40. Scalper1 News
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