Wednesday, April 23, 2008

Two Healthcare Stock Reports

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Illumina (ILMN) is rocketing up again +11% early today on a very good earnings report; this is one of those conundrum stocks - very expensive but seemingly destined to remain so. And as they keep raising guidance, they get a bit less expensive, I suppose. Still at 50x forward estimates! I continue to wait for a meaningful pullback that never really seems to happen. My position is woefully underweight. But I do love stocks like this that perform under the radar of the hordes of momentum traders and ambulance chasers. This is how fertilizer used to be 8-10 months ago ;)
  • Illumina Inc (ILMN), a maker of products used in genetic research, posted first-quarter results and provided 2008 outlook that beat market expectations significantly
  • Excluding items, Illumina earned 37 cents a share this quarter compared with 22 cents a share a year ago. Revenue rose 69 percent to $121.9 million.
  • Analysts on average had expected earnings of 24 cents a share, before special items, on revenue of $115.3 million, according to Reuters Estimates.
  • The San Diego-based company expects 2008 earnings of $1.55 to $1.68 a share, excluding items, on revenue of $515 million to $535 million. Analysts were expecting a profit of $1.18 a share, before special items, on revenue of $519.9 million.
Pharmaceutical Product Development (PPDI) is the first of a slew of the contract research outsource firms to report - they put out a solid number, nothing spectacular, but looking at the charts it seemed people were braced for the worst [Contract Research Organizatiosn Weak Again]- so hearing nothing of the sort was enough to push this stock up 7% this AM. Peer Parexel International (PRXL) reports after the bell and appears to be up 7% in sympathy. This is not a sexy group, but solid growers.
  • Contract research company Pharmaceutical Product Development Inc. said Tuesday its first-quarter profit fell 4 percent on a series of investment charges and writeoffs related to the failed drug candidate SinuNase.
  • The company earned $40.1 million, or 33 cents per share, compared with profit of $42 million, or 35 cents per share, during the same period a year prior. Excluding charges, the company said it earned 44 cents per share. Analysts polled by Thomson Financial expected profit of 43 cents per share.
  • Revenue rose 19 percent to $396.2 million from $332.3 million. Analysts expected revenue to reach $396.3 million.
I continue to favor these types of names over drug companies with FDA risk, or even healthcare organizations - "safe" stocks like UnitedHealth Group (UNH) are down 40% YTD. A lot of investors must be cursing the "safety" of this group.

Long Illumina in fund; no personal position


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