Updated from 11:31 a.m. EDT
Genzyme (GENZ) blew past earnings estimates for the second quarter, expanded its gross margins and increased its guidance, sending the biotech company's shares higher Thursday.
Genzyme earned $123.6 million, or 46 cents a share, in the quarter compared with $78.2 million, or 33 cents a share, a year ago. Excluding amortization and the effect of convertible debt, the company earned $149 million, or 57 cents a share. Analysts estimated a profit of 53 cents a share.
Revenue increased 22% to $668.1 million from $549.6 million. Shares of Genzyme were up $3.82, or 6.2%, to $65.15."We had a tremendous quarter, with strong revenue growth, continued expansion of the gross margin, solid cash flow, and earnings growth that exceeded our expectations," Henri A. Termeer, Genzyme's chairman and CEO, said in a press release. For the quarter, Genzyme's gross margin was 78% of revenue, up from 74% a year ago, thanks to improved margins for Renagel, Synvisc and enzyme replacement products, along with its exit from the generic cyclosporine business. For the third quarter, Genzyme expects earnings of 45 cents to 47 cents a share, or 55 cents to 57 cents a share before items. The company increased its revenue guidance for the year to between $2.6 billion and $2.8 billion from a range of $2.5 billion to $2.7 billion. Genzyme raised its full-year GAAP earnings per share guidance to a range of $1.75 to $1.80 from $1.72 to $1.78. The company lifted its profit forecast to between $2.20 and $2.25 excluding items, which follows a previous upward adjustment in its outlook. Estimated earnings before items exclude amortization and in-process research and development costs of 45 cents a share for the year and amortization expenses of 10 cents a share for the third quarter. Genzyme's performance was the result of major investments over a long period of time, Termeer said during a conference call Thursday. The company has been working toward sustainable growth by increasing production capabilities and sales, he said, but not all businesses are contributing as much. Genzyme plans to further develop its newer oncology, renal and bone care divisions.