Genentech Reports Profit Rise
Genentech (DNA) delivered a 1-cent earnings beat for the third quarter and surpassed expectations with sales of cancer-drug Avastin Monday. Sales of other products, however, fell shy of consensus targets, realizing recent analyst predictions following the release of soft prescription data.
The company reported earning 73 cents a share, or $778 million, before items, compared to 59 cents a share, or $637 million, in 2006.
Analysts surveyed by Thomson financial were looking for 72 cents a share on revenue of $2.93 billion. Genentech reported revenue of $2.91 billion before items (and including $3 million associated with the acquisition of Tanox), a 22% increase over operating revenue of $2.38 billion in the third quarter of 2006.
Despite the dose reduction in Avastin, the company beat the consensus target of $586 million, reporting sales of $597 million, compared to $435 million in the year-ago quarter. It also surpassed Street expectations of $585 million.Genentech was expected to miss targets at least slightly for Rituxan, for non-Hodgkin's lymphoma and as a combination therapy for rheumatoid arthritis, and Lucentis, for wet-age related macular degeneration (AMD), on the basis of recent prescription data. The consensus was $588 million and $210 million, respectively. The company reported Rituxan sales of $572 million, compared to $509 million in the year-ago quarter, and Lucentis sales of $198 million, compared to $153 million in the same quarter in 2006. Sales of breast cancer treatment Herceptin were $320 million, compared to $302 million in the year-ago quarter, and falling short of the consensus target of $339 million. Sales of Tarceva were $101 million compared to $100 million in 2006, and also falling shy of the Wall Street consensus of $111 million. Genentech reaffirmed previous non-GAAP earnings guidance for fiscal 2007 of $2.85 to $2.95 a share, a 28%-32% increase in comparison to 2006. The consensus target is on the high end of that, at $2.95. Shares were falling $1.13, or 1.5%, to $76.37 in after-hours trading.
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