Affymetrix Inc. (NASDAQ: AFFX) is scheduled to release third-quarter earnings after the closing bell on Wednesday, October 20, 2010. Analysts, on average, expect the company to report a loss of 5 cents per share on revenue of $73.55 million. In the year-ago period, the company reported a loss of 11 cents per share on revenue of 78.19 million.
Affymetrix, Inc. engages in the development, manufacture, sale, and servicing of consumables and systems for genetic analysis in the life sciences and clinical healthcare markets. Affymetrix pioneered the genomics research industry as the first company to develop the GeneChip microarray platform, which is used by the world's top pharmaceutical, diagnostic, and biotechnology companies, as well as leading academic, government, and nonprofit research institutes. More than 1,900 systems have been shipped around the world and more than 21,000 peer-reviewed papers have been published using the technology. The company is heavily dependent on orders from research institutions to generate sales.
In the preceding second-quarter, the Santa Clara, California-based company's net loss was $5.54 million, or 8 cents per share, compared to a profit of $7.32 million, or 11 cents per share, in the year-ago quarter. Revenue dropped 12% to $71.68 million from $81.55 million. Analysts, on average, expected the company to report a loss of 7 cents per share on revenue of $74.77 million. Product gross margin was 57.7 percent, as compared to 55.5 percent in the same period of 2009. The company attributed lower than expected second quarter revenues to delayed and lengthened capital equipment purchase cycles by academic research customers, particularly in Europe.
The company has been hit by a sharp reduction in capital spending by academic research customers, particularly in Europe. At its last earnings call, the company said that its analysis of the US and European academic markets indicates that research markets are more competitive than anticipated as relative spending has been reduced as a result of budget cuts by endowments and by private foundations. Within the US, industry feedback and surveys indicate that about 50% of labs do not expect stimulus funding for the year. Only 29% of labs have or are expecting stimulus funding during the year.
Among other developments, the genetic testing technology maker recently announced that it will develop and commercialize the Axiom Chinese myDesign Genotyping Array, the first product that provides maximum power for genome-wide association studies specifically on Chinese populations.
In terms of stock performance, Affymetrix shares have lost more than 20% since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.
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