Two of my favorite biotech companies reported third-quarter results today, and they did not disappoint. If you haven’t already picked them up, both of these stocks are solid “buys” at current prices.
Let’s take a look…
Actavis (ACT) surpassed analysts’ sales and earnings expectations for the third quarter. Actavis reported a net loss of $1.04 billion, or $3.95 per share, compared with last year’s net income of $65.6 million, or 49 cents per share.
These results include costs from Actavis’ recent acquisition of Forest Laboratories (FRX) for $25 billion. Excluding special items, adjusted earnings were $3.19 per share, topping the $3.10 consensus earnings-per-share estimate by 3%. Meanwhile, net revenue soared 83% year-on-year to $3.68 billion. Analysts were looking for $3.63 billion in revenue. So, Actavis posted a 1.4% sales surprise.
And it appears that the best is yet to come: Actavis lifted its fiscal 2014 outlook. Actavis now expects adjusted earnings between $13.51 and $13.61 per share, up from the previous range of $13.02 to $13.32 EPS. The guidance from Actavis is also well above the Street view of $13.29 per share.
ACT is an A-rated Strong Buy in my Portfolio Grader screening tool.
Jazz Pharmaceuticals (JAZZ)
Jazz Pharmaceuticals (JAZZ) reported strong third-quarter results thanks to continued success with specialty drugs Xyrem, Erwinaze and Defitelio. Compared with the year ago quarter, Jazz Pharmaceuticals’ revenues climbed 32% to $306.6 million, topping analysts’ estimates of $302.5 million in revenue.
Jazz Pharmaceuticals’ net income fell 66% year-on-year to $25.77 million, or 41 cents per share, due to a $75 million upfront payment for the rights to defibrotide in the Americas. Excluding special items, adjusted earnings jumped 30.9% year-on-year to $2.33 per share, which also trounced the $2.22 consensus EPS estimate by 10%.
Jazz Pharmaceuticals also lifted its sales and earnings forecast for fiscal 2014. For the current year, Jazz Pharmaceuticals expects adjusted earnings in a range of $8.20 to $8.35 per share on revenues of $1.15 billion to $1.17 billion. Earlier, Jazz Pharmaceuticals had expected adjusted earnings of $8.00 to $8.25 per share on revenues of $1.13 billion to $1.17 billion. Jazz Pharmaceuticals’ revised forecast is also above the Street view of $8.18 EPS on $1.16 billion in revenue.
JAZZ is an A-rated Strong Buy.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.