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Genentech 1Q beats Street
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April 12, 2000: 10:28 a.m. ET
Biotech beats estimates, posts revenue rise; but investors still disappointed
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NEW YORK (CNNfn) - Genentech Inc. posted better-than-expected first-quarter operating earnings Wednesday, but the drug company's highflying stock wavered in volatile trading as the firm's revenue results disappointed Wall Street.
Excluding one-time items, the South San Francisco, Calif.-based company reported operating earnings of $74.7 million, or 28 cents per diluted share, up from $58.5 million, or 22 cents per share, in the year-earlier quarter.
The latest results beat the 26-cents-a-share estimate of analysts polled by earnings tracker First Call Corp.
On a net basis, the company posted a quarterly loss. Including one-time costs associated with a stock redemption during the period, the company had a net loss of $25.9 million, or 10 cents per share. That compares with a profit of $14.4 million, or 5 cents per share, in the first quarter of 1999, which included one-time costs from a $50 million legal settlement.
Revenue rose 20 percent to $385.7 million, fueled by a 72 percent jump in sales of breast cancer drug Herceptin and a 49 percent increase in sales of non-Hodgkin's lymphoma treatment Rituxan.
Nevertheless, the overall revenue results were not as strong as Wall Street had hoped, said Douglas Lind, biotech analyst at Morgan Stanley Dean Witter. Sales of Activase, a blood-clot treatment, slipped 9 percent, while sales of the company's three growth hormone products dropped 2 percent over the 1999 period.
Genentech stock "is really priced for perfection. When you get a mixed quarter like this, some people are saying it might be time to let the Street cool off on those top-line numbers before coming back in," he said.
In New York Stock Exchange composite trading, Genentech (DNA: Research, Estimates) slipped 7 to 129-1/2, recovering from a low of 120 at one point during the morning.
(For more earnings news, click here.) 
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Genentech
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