Oct

11

2005

Notable Earnings: Genentech (DNA) & Infosys (INFY)

In terms of fundamentals, companies don’t get much better than Genentech (DNA) and Infosys (INFY).  The two companies reported outstanding earnings once again after the bell yesterday and both stocks are up about 5% in premarket trading.

Infosys, the premier Indian outsourcer, reported earnings that were up 42% and revenues that were up 38% over the year ago period.  Both revenues and earnings beat analyst estimates and the company raised guidance for 2006.  It’s the kind of growth the company has been reporting every quarter with incredibly consistency for the past couple years.  Infosys is one of the highest ranked stocks fundamentally in the SelfInvestors.com database with a fundamental score of 29/30.  It’s currently in the process of carving out a base that isn’t exactly "pretty".  However, the stock should make a run at all time highs today at 78.74.

Genentech (DNA) is an equally impressive company fundamentally (score of 27/30), consistently posting earnings growth of around 50% in the last several  quarters on revenue growth of around 40%.  So, It should not have come as too much of a surprise when the company reported earnings growth of 56% quarter over quarter (beat by 5 cents) with revenue growth of 46%.  Results were driven by the two cancer fighting blockbusters Avastin (colon cancer) and Herceptin (breast cancer), which saw growth of 78% and 70% respectively in the U.S.  The company boosted ’05 full year guidance, indicating that it sees growth of 50% over ’04, much higher than the 35% growth it had indicated earlier.  The stock is currently in the process of carving out a base.