Genentech Inc. reported a dream fourth quarter yesterday after the market close and raised its outlook for 2007, sending shares higher by 1.15% in after hours trading. The company, which is majority owned by Swiss drug maker Roche Holding AG, saw U.S. sales topped $2 billion for the first time in the company's history. By the numbers, Genentech reported net income of $594 million ($0.55 EPS) compared with just $339 million ($0.31 EPS) during the year earlier quarter. Adjusted EPS was $0.61 for the quarter while operating revenue came in at $2.7 billion, up from $1.9 billion in the year earlier period. Those numbers beat Thomson Financial consensus estimates of EPS of $0.56 on revenue of $2.55 billion. Sales of the company's top-selling drug, Rituxan, jumped 16% to $560 million while its second best seller, Avastin, saw sales jump 36% to $490 million - again surpassing analyst expectations. Looking forward to 2007, the company expects 2007 earnings before items to rise 25% to 30% from 2006's level of $2.23 a share.
• Sources: Genentech Q4 2006 Earnings Call Transcript, Press Release, MarketWatch, Bloomberg, Wall Street Journal
• Related commentary: Genentech is a Hard Act To Follow [WSJ], MedImmune vs. Genentech: Supreme Court Ruling Facilitates Patent Challenges, Genetech to Acquire Xolair Co-developer Tanox for $919 Million, The Biotech Industry: 30 Years of Failure, Starting with Genentech
• Potentially impacted stocks and ETFs: Genentech (DNA), Roche Holding AG (OTCQX:RHHBY). Competitors: Amgen Inc. (AMGN). ETFs: Biotech HOLDRs (BBH)
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