Allergan, Inc. ( AGN - Analyst Report ) reported fourth quarter 2012 earnings of $1.15 per share, missing the Zacks Consensus Estimate of $1.19 per share.

While earnings increased 15.0% from the year-ago quarter, revenues increased 7.6% to $1,508.9 million, slightly above the Zacks Consensus Estimate of $1,504 million.

Full year earnings increased 13.4% to $4.14 per share, missing the Zacks Consensus Estimate of $4.18. Full year revenues increased 7.1% to $5,806.1 million, slightly above the Zacks Consensus Estimate of $5,796 million.

The Quarter in Detail

Specialty pharmaceuticals sales increased 8.2% to $1,254.0 million, with eye care pharmaceutical, Botox and skin care sales driving growth.

Eye care pharmaceutical sales increased 7.1% to $706.1 million with products like Restasis (up 8.1%), Alphagan franchise (up 7.5%) and the Lumigan franchise (up 6.5%) contributing to growth.

Allergan expects Lumigan franchise sales to increase to $630 million - $660 million in 2013 from $622.6 million in 2012. Meanwhile, Alphagan franchise sales are expected in the range of $440 - $470 million in 2013 compared to $453.2 million in 2012.

Restasis sales are expected to increase to $830 million - $870 million in 2013 from $792 million in 2012. Allergan expects Latisse sales to increase to $110 million in 2013, up about 13.1%.

Botox sales increased 14.3% year over year to $474.6 million. Recent approvals for indications like chronic migraine and urinary continence in adults with neurological conditions helped sales.

Allergan expects 2013 Botox sales in the range of $1,900 million - $2,000 million, up from $1,766.3 million in 2012.

Meanwhile, Allergan’s medical devices segment posted sales of $230.6 million, up 2.9%. While breast aesthetics sales increased 5.8% to $91.4 million, facial aesthetics sales increased 12.7% to $102.4 million. The obesity intervention segment continued to disappoint, with sales declining 21.5% to $36.8 million.

Allergan is looking to sell the obesity intervention segment and expects to do the same in the first half of 2013.

Other Details

Selling, general and administrative (SG&A) expenses increased 4.7% during the quarter to $564.8 million. Research and development (R&D) expenses amounted to $239.3 million, up 5.8%.

2013 Earnings Guidance Tops Expectations

Allergan expects 2013 earnings of $4.75 - $4.83 per share – this excludes the impact of the R&D tax credit signed into law earlier this year and the dilutive impact of the company’s upcoming acquisition of MAP Pharmaceuticals ( ) . The company expects product net sales to range from $5,900 - $6,200 million in 2013, up from 2012 product net sales of $5,549.3 million (excluding obesity segment sales).

The estimated impact of the R&D tax credit on net earnings for 2012, which will be recognized in the first quarter of 2013, is about 6 cents per share.

Earnings guidance was above expectations with the Zacks Consensus Estimate currently standing at $4.74 per share.

For 2013, Allergan expects total specialty pharmaceuticals net sales of $5,100 million - $5,340 million, up from 2012 total specialty pharmaceuticals net sales of $4,784.6 million.

The company expects medical devices net sales of $800 million - $860 million. Here, performance will be driven mainly by facial aesthetics. Facial aesthetics sales are expected in the range of $410 million - $440 million, up from $387.6 million in 2013.

Breast aesthetics sales are expected in the range of $390 million - $420 million, up from $377.1 million in 2012. The obesity intervention unit will be treated as discontinued operations from the first quarter of 2013.

For 2013, Allergan expects cost of sales to product net sales ratio of about 13.5%, SG&A expenses to product net sales ratio of 37% - 38% and R&D expenses to product net sales ratio of 16.5%.

Allergan expects first quarter earnings in the range of 94 – 96 cents per share on product net sales of $1,375 million - $1,450 million. The Zacks Consensus Estimate currently stands at $1.03 per share, well below the company’s guidance range. However, we note that Allergan’s guidance does not include the impact of the R&D tax credit which will be recognized in the first quarter.

Allergan currently carries a Zacks Rank #3 (Hold). While we believe Allergan’s presence across different segments will help maintain growth going forward, companies like Novo Nordisk ( NVO - Analyst Report ) and Sanofi ( SNY - Analyst Report ) currently look better-positioned. Novo Nordisk is a Zacks Rank #1 (Strong Buy) stock and Sanofi is a Zacks Rank #2 (Buy) stock.