Genentech Hikes Profit Forecast

Updated from 5:21 p.m. EDT

Genentech (DNA Quote), the world's biggest biotech company measured by market cap, turned in second-quarter revenue that rose 44% from last year and produced earnings that easily exceeded analysts' consensus target.

However, softer-than-expected sales of the cancer drug Avastin brought down Genentech's shares in postmarket trading. Lately, the stock was falling $2.37, or 2.8%, to $81.69. During the regular session, Genentech gained 33 cents to $84.06.

After the close Tuesday, Genentech said its quarterly operating revenue climbed to nearly $2.2 billion from $1.53 billion a year ago. Earnings rose to $531 million, or 49 cents a share, from $296 million and 27 cents a share last year.

Before items, the South San Francisco, Calif., company would have earned 56 cents in the latest quarter, 9 cents ahead of estimates. Analysts surveyed by Thomson Financial were calling for a profit of 47 cents a share and a top line of $2.12 billion in the quarter.

Looking ahead, Genentech now expects its full-year earnings, excluding items, will grow 55% to 60% from last year's $1.28 a share, implying a profit of roughly $1.98 to $2.05. The average analyst estimate is $1.96. Previously, the company had projected an earnings improvement of 45% to 55%.

Total product sales for the second quarter reached $1.81 billion, up 42% from $1.27 billion in the same period a year ago. Avastin's U.S. sales were up 72% to $423 million, but that was short of what the market was hoping to see.

U.S. sales of Rituxan, Genentech's top seller, increased 17% to $526 million from $450 million last year. Herceptin's domestic revenue more than doubled to $320 million from $152 million.

Tarceva sales rose 47% to $103 million, sales of Xolair grew 31% to $105 million, and revenue from Lucentis, the recently approved treatment for the eye disease wet age-related macular degeneration, totaled $10 million. Raptiva's sales were up 5% to $22 million.