Genentech’s First-Quarter Profit Soars 28%
Genentech Inc. reported Wednesday that operating profit rose 28% in the first-quarter and beat Wall Street estimates as solid sales of two key cancer drugs offset weak sales elsewhere.
The South San Francisco-based biotech giant said profit from operations rose to $74.7 million, or 28 cents a share, before one-time charges as revenue jumped 20% to $385.7 million. Analysts on average were forecasting Genentech would earn 26 cents, according to First Call/Thomson Financial.
“The earnings were just OK, but there has been a lot of progress in the pipeline. I think people are starting to pay attention to that,” said Matthew Geller, an analyst at CIBC World Markets. He also raised his rating on Genentech to “buy” from “hold.”
Sales of Genentech’s breast cancer drug Herceptin soared 72% to $68.7 million. Sales of Rituxan, a drug used to treat patients with non-Hodgkin’s lymphoma that Genentech markets with Idec Pharmaceuticals Corp., grew 49% to $85 million, but not as strong as analysts expected.
Genentech’s sales of growth hormones, including Protropin and Nutropin, and sales of its Activase anti-clotting therapy fell slightly.
Genentech said it plans to file for regulatory approval of anti-Ige, a humanized monoclonal antibody for treatment of asthma, by the second quarter. The company also said it is conducting early-stage work on several cardiovascular drugs, including TNKase, an experimental drug for heart attack victims.
Genentech also said its research-and-development costs rose to $111.4 million, or 23%.
Genentech shares fell $8.50 to close at $128 on the New York Stock Exchange.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Delphi Automotive Systems Corp.’s first-quarter earnings rose 13% to $322 million, or 57 cents a share, a penny higher than estimates, with help from cost-cutting. The auto parts company’s sales rose 4.4% to $7.8 billion.
* ETrade Group Inc. narrowed its operating loss in its fiscal second quarter to $22.6 million, or 8 cents a share, as trading volume surged and the online broker added a record 603,000 net new accounts for a total of 2.6 million. Analysts were expecting a much larger loss of 16 cents. In the year-earlier period, ETrade lost $23.5 million, or 9 cents, on operations. Revenue more than doubled to $407.4 million from $161.8 million.
* Enron Corp., one of the first companies to exploit opportunities created by U.S. energy deregulation, said first-quarter earnings rose 34% to $338 million, or 40 cents a share, as it traded more power and natural gas and added energy-service customers. Analysts were expecting 37 cents on average, with forecasts ranging from 30 cents to 38 cents. Sales rose 72% to $13.1 billion.
* Fannie Mae said first-quarter profit rose 15% to $1.06 billion, or $1.02 a share, as it profited from a growing portfolio of home mortgages.
* J.P. Morgan & Co. said first-quarter earnings rose 4.7% to $628 million, or $3.37 a share, as the company benefited from growth in the equities business it built from scratch over the past decade to transform from a traditional lending bank into an investment bank. Equities revenue more than doubled to $636 million on higher broker commissions and higher fees from underwriting stock. Chairman Douglas Warner had said March 13 that profit was on track to be much higher than the fourth quarter’s $2.63 a share. Based on that, analysts posted an average estimate of $2.81 a share, according to a First Call/Thomson Financial survey.
