Genentech ( DNA) announced impressive second-quarter sales for its Avastin colon cancer drug after the close Wednesday, handily beating lofty investor expectations and giving analysts good reason to boost sales forecasts.

Avastin sales in the quarter totaled $133 million, well above the sell side's consensus forecast of $85 million and topping even Wall Street's $100 million "whisper" estimate.

On its conference call Wednesday night, Genentech executives said there was no significant increase in inventory stocking during the quarter, which puts Avastin on a $500 million-plus sales run rate for the year. On average, sell-side analysts are currently forecasting about $400 million in Avastin sales this year, so don't be surprised if some analysts raise their numbers.

Avastin's first full quarter of sales was the big investor focus of Genentech's second-quarter earnings report, and the positive result was reflected in the stock's 2.4% rise to $55.18 in after-hours trading. The stock closed down 1.4% to $53.90 in Wednesday's regular trading session.

But Genentech is more than just Avastin, and the rest of the company's earnings report was solid, but not necessarily a home run. Pro forma earnings per share rose 19% vs. a year ago to 19 cents, in line with the consensus estimates, according to Thomson First Call.

Given the big upside surprise in Avastin sales, Genentech's bottom-line result seemed a bit of a disappointment. But the company did take two one-time charges totaling almost $59 million in the quarter, which one fund manager estimated at about 3 cents per share. Put that back in and Genentech could have earned 22 cents per share in the quarter.

Genentech also raised earnings guidance for 2004 to the range of 75 cents to 80 cents per share, but Wall Street was already forecasting 79 cents per share. If anything, Genentech's new guidance suggests the company intends to spend some of the Avastin upside this year on new product launches and more research and development, instead of allowing the sales to flow to the bottom line.

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