Affymetrix Inc (AFFX), a consumable and system maker for genetic analysis, Wednesday reported a narrower net loss for the third quarter of fiscal 2009, reflecting improved gross margins and sales, as well as lower expenses.
The Santa Clara, California-based company's net loss for the third quarter narrowed to about $8.8 million or $0.13 per share from $31.8 million or $0.46 per share last year.
Results for the third quarter include a pretax restructuring credit of $0.3 million. The prior-year quarter results included a pretax restructuring charge of $14.6 million or $0.21 per share.
On average, 14 analysts polled by Thomson Reuters expected the company to report a loss of $0.09 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.
In the preceding second quarter, Affymetrix swung to a profit notwithstanding a decline in revenues. The company reported second quarter net income of $7.32 million or $0.11 per share, compared to a loss of $3.64 million or $0.05 per share in the same quarter last year.
Revenue for the latest quarter increased 4% to $78.20 million from $75.20 million in the year-ago quarter. In constant currency terms, revenues for the quarter were negatively impacted by $1.2 million. Analysts expected the company to report revenue of $80.67 million for the quarter.
For the preceding quarter, revenues were $81.55 million, down from $86.91 million in the previous-year quarter. Product sales for the recent third quarter rose modestly to $66.17 million from $66.00 million last year, which consisted of consumable revenue of $62.0 million and instrument revenue of $4.2 million. Service revenue increased to $9.90 million from $6.13 million in the previous-year quarter, while royalties and other revenue decreased to $2.12 million from $3.10 million in the year-earlier period.
Gross margin for the quarter expanded to 54% from 51% in the prior-year period. Total costs and expenses for the quarter declined to $84.95 million from $107.00 million in the year-ago quarter. Operating expenses for the quarter decreased to $49.1 million from $68.8 million last year, and included restructuring credit of $0.3 million.
Cost of product sales for the quarter was $30.73 million, compared to $32.35 million in the same quarter last year. Cost of services and other was $5.14 million, compared to $5.82 million in the year-ago quarter.
During the quarter, Affymetrix shipped 21 systems, bringing its cumulative systems shipped to about 1,890.
Kevin King, Chief Executive Officer, Affymetrix said, "Revenue for the third quarter increased 4% over the prior year and was within the range of our guidance. While gross margin improved by 5 points over last year, we have more work to do to generate additional margin contribution from new products going forward. Finally, we maintained good control of our operating expenses."
The company noted that in October, Kaiser Permanente and the University of California at San Francisco entered into an agreement with it to conduct genome-wide analyses of DNA samples. The company also announced an agreement with Beckman Coulter to offer researchers co-developed products from market leaders in microarrays and automated liquid handlers.
For the nine-month period, the company reported a net loss of $26.70 million or $0.39 per share, compared to net income of $10.80 million or $0.16 per share last year. Total revenue for the period decreased to $238.31 million from $331.67 million in the same period last year.
Amongst others in the sector, Fullerton, California-based biomedical testing instrument systems maker Beckman Coulter Inc. (BEC), is slated to release its third quarter results on Thursday, October 30, after market close. On average, 12 analysts currently estimate the company to earn $0.84 for the quarter.
AFFX closed Wednesday's regular trading at $8.86, up $0.20 or 2.31%, on a volume of 1.70 million shares on the Nasdaq. In after hours, the stock lost $0.47 or 5.30% and was trading at $8.39. In the past 52 weeks, the stock trended in a broad range of $1.78 - $10.06, with a three-month average volume of 1.13 million shares.
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