On April 11, Genentech (NYSE:DNA) released first-quarter earnings for the period ended March 31.

  • Total revenues jumped by 43%, due to strong performance from cancer blockbuster Avastin and the launch of Lucentis.
  • Genentech's leading product, Avastin, witnessed a 34% rise in U.S. sales to $533 million, putting it on track to break the $2 billion barrier this year.
  • Genentech and partner Biogen Idec (NASDAQ:BIIB) submitted a supplemental Biologics License Application to the FDA to include treatment of active rheumatoid arthritis by existing product Rituxan. This would be an important label expansion for a product that is already a blockbuster drug.
  • The company continues to expect approximately 25%-30% growth in non-GAAP EPS for full-year 2007.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$2,843

$1,986

43.2%

Net Profit

$706

$421

67.7%

EPS

$0.66

$0.39

69.2%

Diluted Shares

1,071

1,075

(0.4%)

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

86.2%

86.8%

(0.6)

Operating Margin

37.3%

32.4%

4.8

Net Margin

24.8%

21.2%

3.6

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$2,903

$2,284

27.1%

Accounts Rec.

$1,692

$1,134

49.2%

Inventory

$1,297

$804

61.3%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

No Data

No Data

No Data

Long-Term Debt

$2,267

$2,103

7.8%

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

No Data

No Data

N/A

Capital Expenditures

$209

$253

(17.4%)

Free Cash Flow

No Data

No Data

N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

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