WASHINGTON (AP) — Shares of Jazz Pharmaceuticals rose Wednesday after analysts shrugged off the company's disappointing second-quarter results and focused on higher full-year guidance for 2013.
THE SPARK: Jazz said late Tuesday that its adjusted income rose more than 30 percent to $1.43 per share in the three months ended June 30. But that was below analysts' average estimate of $1.52 per share, according to FactSet.
Despite the missed earnings, company management boosted its full-year earnings per share forecast to between $6.10 and $6.30 per share from $6.20 to $6.40 per share. It now expects revenue of $860 million to $880 million, up from $830 million to $860 million. Wall Street was expecting earnings of $6.22 per share, on average, on sales of $852.6 million.
THE ANALYSIS: Cantor Fitzgerald analyst Irina Rivkind reiterated a "Buy" rating on the stock, stating that company shares should trade higher in coming months.
"The earnings miss can be attributed to increased investment into the business — a welcome change from other companies who cut costs to make their bottom line," Rivkind said in a note to investors.
THE BACKGROUND: Dublin-based Jazz markets the narcolepsy treatment Xyrem. The drug is Jazz's best-selling product, but the company warned in May that rival Roxane Laboratories could win approval from the Food and Drug Administration for a generic version of the drug. Jazz has been suing Roxane over the company's application for the generic drug since 2010.
Jazz raised 2013 Xyrem sales guidance to between $560 million and $570 million, from $540 million and $555 million. The company also said it obtained two new patents on Xyrem, which could help protect the drug from generic competition.
SHARE ACTION: Shares of Jazz Pharmaceuticals Public Limited Company rose $1.99, or 2.6 percent, to $79.98 in midday trading, after earlier jumping as high as $80.22..