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business newsForest Labs Finds Money Grows on Trees Today
By
Justin Sharon
Jan 18, 2011 4:40 pm
The drugmaker announced third quarter per share earnings of $1.34, a 53% increase that "blew out" consensus expectations of only $0.99.
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The 55-year-old New York City-based firm announced third-quarter per share earnings of $1.34, a 53% increase that “blew out” consensus expectations of only $0.99, according to analyst Louise Chen at brokerage Collins Stewart. Moreover, the branded and generic drugmaker gave good forward guidance and now sees EPS of between $4.20 and $4.30 per share, again above what Wall Street was looking for. Although next year’s patent expiration for Lexapro looms large, its sales still increased 1% to $586.5 million while revenues of Namenda, not due to face generic competition until 2015, surged some 13.2% to $319.8 million.
A relatively robust pipeline does “represent several billion dollars of potential sales in the long term, sufficient over time to replace the revenues lost” with these twin medications, Chief Financial Officer Frank Perier said on a company-sponsored post-earnings conference call with equity analysts.
Other key therapeutic areas include Bystolic for the treatment of hypertension and Savella to manage fibromyalgia. The latter is often derided as a "Yuppie" disease but it, along with a promising treatment for chronic obstructive pulmonary disease (COPD) currently in Phase III clinical trials, could represent a rich revenue stream as the population inexorably ages.
Drug discovery is an inherently dicey business, and the firm has suffered some setbacks with both desmoteplase and faropenem. Still, with shares having underperformed the market for the past year even after today’s gain, we could now be witnessing a catch-up case of “Run Forest, Run.”
Please see Sex, Drugs, and the Rocky Economy: Drugs, Brain Train, and -- although only after first popping a couple happy pills -- Why the Economy Is Headed for Another Depression.
Just in time for the four-day state visit of Chinese Premier Hu to our shores, 18-year-old Beijing-based New Oriental Education & Technology Group (EDU) is taking its 12-month gain to more than 50% after announcing fiscal second-quarter earnings.
This company started as a single night school offering English test preparation to university students in the country’s capital, and has since morphed into a foreign language, admission, and academic assessment powerhouse. Its approximately 50 schools, 222 learning centers, and 24 bookstores offer all manner of training and online instruction to a captive audience eager to become minimally bilingual in order to take advantages of the opportunities on offer in a global economy. (Incidentally, amid the Mother of all arguments currently raging over the relative merits of East versus West parenting styles, it’s worth noting that language training at least is a two-way street, with many American moms and dads eager to get 2-year-old Timmy speaking Mandarin from the get-go also.)
China’s largest private educational services provider reported total K through 12 net revenues rose by 56.3% on an annual basis, to $95.7 million, as total tutoring enrollment increased by 32.2% to roughly 405,800 students. Louis T. Hsieh, president and CFO, cited “continued strong growth in each of our key business segments.”
In a global village such as ours any student able to knock down the Tower of Babel will have a leg up in this increasingly interconnected economy. Risks are real however and include a stock priced for perfection and formidable test prep competition from well-funded Kaplan, part of the Washington Post (WPO) organization.
Also check out Three Better Stock Picks Than New Oriental Education and China’s Scramble to Increase GDP Will Hurt in the Long Run.
Jets coach Rex Ryan, notwithstanding his own foot fetish, will have been undeniably ecstatic to see Uggs endorser and Pats quarterback Tom Brady slip up so spectacularly yesterday. But New England is perhaps having the last laugh today, thanks to a footwear firm founded in Boston and headed by a graduate of Phillips Academy in Massachusetts, Rhode Island’s Brown University, and New Hampshire’s own Dartmouth College. The Timberland Company (TBL) is certainly kicking it under CEO Jeffrey Swartz this afternoon, currently up more than 2% to a fresh 52-week peak. Susquehanna recently raised its 12-month price target to $32 from $28, which still leaves ample upside at the firm whose rugged boots and other items are so beloved by outdoorsey types.
Timberland’s hand-sewn oxfords and boat shoes are clearly befitting from the current Preppy revival, ironically enough in the case of an apparel outfit founded during the depths of the Depression. It boasts an impeccable balance sheet and continues to generate good cash flow at its assorted company-owned specialty shops and factory outlet stores in the US, Europe, and Asia.
Areas of concern include EU-imposed tariffs on China and Vietnam boot imports, an always fickle fashion market, and rival offerings at a resurgent Columbia Sportswear Company (COLM).
Religious CEOs: Timberland’s Jeffrey Swartz has insight into the company’s unconventional chief executive.
Another crumb of consolation for Mr. Brady, once’s he’s done eating crow, comes from this afternoon’s performance of a food firm that was originally part of Boston Chicken. An analyst downgrade of Tim Hortons (THI) has sent its shares sharply lower today, but if there’s no dollars in donuts at least it doesn’t take a genius to make money in bagels. Einstein Noah Restaurant Group (BAGL) is surging more than 4% after being boosted to Buy from Hold at Stifel Nicolaus this morning.
Stock in the Colorado company, which operates about 685 quick service outlets in 37 states, is riding a Rocky Mountain -- and 52-week high -- after the marvelously named Matthew Van Vliet raised his rating. The researcher, whose $18 price objective remains intact, wrote in a note that Einstein’s new BagelThin sandwiches and less calorific menu offerings should boost same-store sales, customer foot traffic, and average selling prices.
This stock has something of a checkered history, and its cutthroat competition includes category killer Starbucks (SBUX) along with more niche rivals such as Panera Bread (PNRA). Still, with a dividend yield of 3.50%, shares are attractive any way you slice it. (Well perhaps not in New York, with those tax forms arriving in the mail.) For the rest of us, open wide and enjoy Einstein’s offerings.
Turn to Investors Uncover Panera Bread’s Secret Ingredient and Cream Cheese and Critters for more.
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No positions in stocks mentioned.
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