* Amgen (AMGN, $61.55)

-AMGN reported 3Q EPS of $1.23 (excluding items) vs. $1.08. Estimates were $1.08. 3Q Revenue was up 7.3% to $3.88B. The Street was expecting 3Q revenue of $3.7B. 3Q NI was $1.16B, up from $201 million.

-Following 3Q results, AMGN raised its 2008 EPS guidance to $4.45-$4.55. Amgen’s previous guidance was $4.25-$4.45. The Street was projecting $4.38. Amgen is now forecasting 2008 revenue of $14.9B-$15.2B, up from a previous range of $14.6B-$14.9B.

-3Q Highlights:

*Aranesp sales were up 3% to $845 million. Sales benefited largely due to an accounting change. Excluding any benefits from the accounting change and foreign exchange gains, Aranesp sales actually declined 8%.

*Many analysts believe the bottom may have been hit or is very near for the sales of the anemia franchise.

*Enbrel sales rose 9% to $893 million.

*Neulasta and Neupogen (to fight infections in chemotherapy) sales were up 8% to $1.19B.

*Amgen is holding an investor meeting November 7 th that will provide more details on Denosumab. Amgen is expected to file for D-mab’s approval this year.

*3Q R&D expenses were flat.

-Bloomberg 11/4/08 “Amgen, Like Pfizer, Targets Biotechs With Ready Cash.”

*Amgen is just one of a few biotechs with a sizeable cash position. Amgen has more cash than just two US pharmaceutical companies (PFE & WYE). Amgen holds $9.76B in cash and marketable securities.

* BUD (BUD, $63.54)

-InBev’s Brito has reiterated his commitment to get the BUD deal done. He said the deal could get done in November.

-BUD’s Board of Directors declared a regular quarterly dividend of $0.37/share, payable December 9 th to shareholders of record on November 10 th.

-USA Today 10/27/08 “Beer sales slip across Europe; pricey brands down in US.”

* Bristol-Myers (BMY, $20.55)

-BMY reported 3Q EPS of $0.46 (excluding items). Estimates were $0.42. 3Q NI was $2.58B, or $1.29/share, up from $858 million, or $0.43/share. The most recent quarter included a gain from the sale of ConvaTec. 3Q sales rose 14% to $5.25B.

-3Q Highlights:

*Plavix sales rose 15% to $1.44B.

*Abilify sales rose 34% to $564 million.

*Erbitux sales were down 1% to $184 million.

*BMY narrowed it 2008 EPS estimate to $1.65-$1.70. The previous estimate was $1.60-$1.70. The Thomson estimate is $1.65.

*BMY cash balance is $7.2B. The cash is up from $4B due to the sale of ConvaTec.

*BMY expects $1B for its ownership (17%) in ImClone. BMY CEO James Cornelius said he plans to talk to LLY as soon as the deal closes in regards to the dispute over IMC-11F8.

*BMY wrote down $224 million in the value of its auction-rate securities portfolio in the 3Q.

-The US FDA is far along in its review of Eli Lilly’s anti-clotting drug, prasugrel. The agency has not provided a target date when a decision might be made. The initial review was to be completed September 26 th.

-BMY filed a complaint alleging that Abbott Lab’s sales of infant formula infringes its patent rights.

-The discontinuation of an experimental diabetes drug by Sanofi could have implications for BMY and AstraZeneca (AZN) because they are co-developing a drug in the same class.

* CVS Caremark (CVS, $30.83)

-CVS reported 3Q EPS of $0.56 from continuing operations vs. $0.45. Estimates were $0.56. 3Q revenue was up 1.8% to $20.86B. The Thomson Reuters revenue estimate was $21.06B. 3Q NI was up 6.8% to $732.5 million.

-3Q Highlights:

*Same store sales rose 3.7% (front-end +3.3%, pharmacy +3.8%). Generic introductions hurt pharmacy same-store sales by 280 bps.

*Gross margins increased to 21.1% from 20.5%.

*The third party % of pharmacy revenue, in the most recent quarter was 95.9%.

-Barron’s 10/29/08 “Drug Retail Sales May Have Stabilized.”

-CVS is introducing Beauty 360 stores. The store within a store concept, offers high-end cosmetics and beauty services like manicures and facials. The first test store will open in Washington, DC. A second store is set to open in California. CVS hopes to open approximately 50 stores next year. None of the brands sold in Beauty 360 are exclusive yet. Plans are to have all stores connected to a CVS location.

-CVS introduced a new pharmacy savings program for the uninsured. The CVS Health Savings Pass charges a $10 annual enrollment fee and offers participants a 90-day prescription for one of more than 400 generic prescriptions at $9.99. The plan also provides access to services and screenings at MinuteClinic at a 10 percent discount for cash-paying customers.

* Johnson & Johnson (JNJ, $61.16)

-JNJ announced the purchase of HealthMedia Inc., a web-based provider of consumer health care. Terms were not disclosed. JNJ was a client of HealthMedia.

-Sales of JNJ’s ADHD drug Concerta have been up. Sales outside of the US have been particularly strong. The drug can be taken once daily compared to its competitors that require dosing two to three times a day.

-The FDA granted wider approval to JNJ’s HIV drug, Prezista. The drug can now be given to newly diagnosed patients. It was first approved in 2006 for use in patients who were resistant to other drugs.

-JNJ submitted a NDA to the FDA for carisbamate for the adjunctive treatment of partial onset seizures in patients 16 years of age and older.

-Barron’s 10/27/08 “J&J: A Balm For Your Portfolio.”

* Kimberly-Clark (KMB, $60.83)

-KMB reported adjusted 3Q EPS of $1.02 vs. $1.07. Estimates were $1.01. 3Q sales were up 8.2% to $5B. 3Q NI fell 8.8% $413.1 million.

-3Q Highlights:

*Following the 3Q release, KMB cut its 4Q and 2008 earnings forecast. The company is continuing to be pressured by commodity costs. KMB cut its 2008 forecast by $0.05 to $4.15-$4.25. The 4Q EPS guidance was set at $1.02-$1.07. The Thomson Reuters 4Q EPS estimate was $1.12.

*Sales were up in all four KMB divisions: Personal Care + 11.7%, Consumer Tissue +5%, KC Professional 8%, Health Care +3.7%.

*FORCE Program; year-to-date savings are behind schedule and there is the possibility of not making the year’s goal of saving $200-$250 million.

*Gross margin fell to 29.2% from 31.2%.

*Despite the latest results, KMB CEO Thomas Falk said the company is likely to raise its dividend next year.

*The company did reduce its full year target for share repurchases to $600-$650 million, down from $700-$800 million.

*Falk also said KMB has had ready access to credit and the demand for its commercial paper program has continued to be strong.

* McDonalds (MCD, $57.03)

-MCD reported 3Q NI and revenue that beat expectations. Gross margins saw a significant improvement in the quarter. Same-store sales were up 7.1%, +4.7% in the US.

-WSJ 10/27/08 “McDonald’s Coffee Strategy Is Tough Sell.”

*MCD executives say franchisees have ample financing options.

*The coffee strategy is one track.

-Insider buys

-MCD is said to be changing up its dollar menu. The double cheeseburger is likely to see a price increase and a new item could appear on the dollar menu that is similar to the double cheeseburger, with the exception of only one slice of cheese (McDouble).

-MCD is in the early stages of testing new products and cooking methods. The new items are likely to be more health and energy conscious.

* Pfizer (PFE, $17.76)

-PFE reported adjusted 3Q EPS of $0.62 vs. $0.58. Estimates were $0.60. 3Q revenue was $11.97B, slightly below Thomson Reuters estimate of $12.01B and year-ago revenue of $11.99B.

-3Q Highlights:

*Lipitor sales fell 1% to $3.1B. Lipitor sales were down 13% in the US. PFE said the global market for cholesterol drugs is facing decelerating growth.

*Lyrica sales rose 45% to $675 million.

*Celebrex sales rose 8% to $625 million.

*Sutent sales rose 49% to $226 million.

*Chantix sales fell 24% to $182 million. In the US, Chantix sales were down 49% to $96 million. The FDA may upgrade its warnings on the drug. Chantix had $883 million in sales last year.

*Animal health sales rose 11% to $708 million.

*R&D expense rose 2% to $1.8B.

*The most recent quarter includes a charge of $640 million for the settlement of litigation related to marketing of Celebrex and Bextra.

*PFE said it is ahead of schedule in its cost-cutting measures and has decided to increase its targeted reductions for the year.

*PFE narrowed its 2008 EPS guidance to $2.36 to $2.41, from a previous $2.35 to $2.45.

*The company also narrowed its 2008 revenue forecast to $48B-$49B, from the previous range of $47B-$49B.

*For 2008, analysts are expecting earnings of $2.37/share on revenue of $48.73B.

*CEO Jeff Kindler did not indicate if the weakness in the market was making the company more inclined to pursue a more aggressive acquisition strategy.

-The Institute for Safe Medication Practices (ISMP) said a new report based on the analysis of gov’t data indicates there were 1,001 serious incidents involving Chantix users in the 1Q2008. PFE said the report is inconclusive. The ISMP acknowledged the reports alone do not prove Chantix caused the incidents.

-The FDA is taking an additional three months to review Fablyn for the treatment of osteoporosis in postmenopausal woman. A decision was originally expected by the end of October. The drug is estimated to bring in peak sales of $1B.

-The European Medicines Agency is not recommending Eli Lilly’s Cymbalta for the treatment of fibromyalgia. Cymbalta is approved for the treatment of depression and anxiety in Europe. In the US, the drug is also approved for the treatment of fibromyalgia.

-The FDA approved Toviaz for the treatment of overactive bladder. Schwarz Pharma of Germany makes the drug. Pfizer will market the drug in the US.

-A study from the University of Iowa indicates that mice with muscular dystrophy that were treated with Viagra did not suffer the usual fatigue after mild exercise.

* Wal-Mart (WMT, $55.97)

-WMT announced that is cutting its capital spending plans with a slowdown in US store openings. WMT will continue with its plans to increase sales at existing locations by remodeling stores and improving merchandising. The company estimates 191 new US Wal-Marts in fiscal 2009, down from 218. WMT estimates between 142 and 157 new stores in 2010. WMT plans $5.8B-$6.4B in capital expenditures this fiscal year for its US division, down from $9.1B last year. In 2010, WMT plans to spend $6.3B-$6.8B.

-WMT said it would shift more than half of its international capital-spending budget to faster-growing emerging markets over the next five years. Previously, the focus had been on more established markets like the UK and Canada. WMT will now focus on markets in areas like Brazil and China.

-Sam’s Club plans to open a warehouse club with imported products from Mexico. The goal is to target Hispanic customers. The new store will be called Mas Club. Sam’s is also testing a smaller warehouse club in Kansas to see if the format would work in smaller markets.

-WMT is not running into trouble in the commercial paper market. The company has been able to borrow several hundred million at an interest rate of “substantially less” than 2 percent.

-Wal-Mart US President and CEO Eduardo Castro-Wright said traffic at stores serving households with income above $65,000 has been growing at a much faster rate than at the chain as a whole.

-WMT noted that its customers are delaying purchases, even waiting until pay-periods to buy the most basic necessities. Credit purchases are on the decline.

-WMT said it has achieved annual sales growth of at least 25% in China. The company still expects double-digit growth going forward. A dollar figure of Chinese sales was not provided. WMT has more than 100 stores in China and operates about 6,000 worldwide.

-WMT is hitting its Chinese suppliers with more stringent environmental and safety mandates. The requirements will be phased in next year. Manufacturers that sell directly to WMT must also provide the company with a list of their suppliers.

-Given the current economic environment, a number of retailers are bringing the “layaway plan” back. Both WMT and Target said they have no plans to bring it back. WMT ended its plan in November of 2006.

-Target plans to change its marketing strategy this holiday season. TGT plans to change perceptions that its products are pricier than Wal-Mart’s. Target has also started to increase its offerings of perishables and other grocery items.

-Barron’s 10/20/08 “A Tough Sell In A Very Tough Environment.”

*Recessions are not bad for the stronger players because square footage gets cleared out, getting rid of secondary players and the ones that emerge should be stronger.

*WMT is one of the least vulnerable to the credit crisis. WMT pulled back capital spending in 2006.

*Retailers that sell the necessities are positioned the best.

-WMT plans to offer some music downloads for just $0.74. A number of songs will still be offered at $0.94, but “Top 25” songs will sell for $0.74.

-JP Morgan upgraded WMT to overweight from neutral. The price target was raised to $65, up from $56.

* Zimmer (ZMH, $45.16)

-ZMH reported adjusted 3Q EPS of $0.97 vs. $0.91. Estimates were $0.89. ZMH realized a $0.08/sh gain on the sale of certain equity holdings. 3Q revenue came in at $952.2 million, up 5.4% from the comparable quarter. Despite the increase in 3Q revenue, the number was weaker than analysts were expecting. 3Q NI was $214.7 million, compared to $44.5 million

-3Q Highlights:

*Analysts are concerned that ZMH may have been over zealous in its reforms and in the process, ZMH drove away some of its consultants. The reforms have delayed development meetings and training courses. ZMH is confident that the changes were necessary for the long term.

*Following the release of 3Q results, ZMH again lowered its full year guidance. ZMH now expects 2008 EPS of $4.03-$4.08. ZMH also lowered its sales-growth 1.5 percentage points to 7%-7.5%.

*Knee revenue was up 9%. Hip revenue was up 5%.

*ZMH resumed marketing of the Durom replacement hip cup in August. The voluntarily suspension of sales was due to how surgeons were implanting the device.

* Pharmaceuticals

-IMS Health expects drug sales to rise just 1%-2% in 2008. A year ago, the forecast was 4%-5%.