Thursday, diagnostic product maker Gen-Probe Inc. (GPRO), reported a decline in third quarter profit on higher expenses. Revenues for the quarter improved 1%, impacted by a stronger U.S. dollar that reduced sales growth by 2%. Product sales, however, registered a record 10% growth during the quarter. Looking ahead, the company tightened its full year outlook.
Gen-Probe's net income dropped to $22.20 million or $0.44 per share from $29.08 million or $0.52 per share in the same period last year.
Non-GAAP net income for third quarter was $23.78 million or $0.47 per share, compared to $29.1 million or $0.52 per share in the year ago quarter.
On average, nineteen analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted earnings excluded $1.58 million or $0.03 per shaer after tax charge related to the company's acquisitions of Tepnel and Prodesse and the industrial spin-off. The year-ago quarter included a one-time milestone payment of $10.0 million.
The San Diego, California-based company's total revenues for the quarter was $122.70 million, up from $121.18 million for the prior year quarter. Eighteen analysts had consensus revenue estimate of $123.31 million for the quarter.
Product sales for the quarter grew to $118.95 million from $108.25 million in the same period last year. Collaborative research revenue dropped to $2.00 million from $11.34 million a year earlier. Royalty and license revenue rose to $1.75 million from $1.58 million last year.
On product basis, clinical diagnostics segment grew by 25% to $69.6 million from $55.5 million in the year-ago period, helped by revenues from Tepnel's transplant diagnostics, genetic testing products and continued strong growth of the APTIMA Combo 2 assay.
Blood screening revenues dropped by 14% to $45.4 million from $52.7 million in the year earlier period, impacted by $7.9 million of lower product shipments to Novartis.
Total operating expenses rose to $93.67 million from $78.81 million last year. Cost of product sales increased to $36.34 million from $30.68 million for the same period last year, while research and development expenses were $27.46 million for the third quarter, up from $24.51 million last year.
Marketing and sales expenses for the quarter increased to $13.48 million from $10.71 million a year earlier. General and administrative expenses rose to $15.23 million from $12.91 million for the year-ago period.
In the sequentially preceding second quarter, the company's net income was $19.8 million or $0.38 per share, down from $24.8 million or $0.45 per share in the similar quarter a year ago. On an adjusted basis, net income declined to $23.2 million or $0.45 per share from $24.8 million or $0.45 per share in the year-ago quarter. Revenues for the second quarter increased 1% to $120.5 million from $119.8 million in the same quarter last year.
Earlier today, Gen-Probe revealed an approval from the US Food and Drug Administration related to an EUA or emergency use authorization for its Prodesse's test, ProFlu-ST, to be used in CLIA high complexity laboratories for the diagnosis of 2009 H1N1 influenza virus infection.
The emergency use authorization authority allows the FDA, based on the evaluation of available data, to authorize the use of unapproved or uncleared medical products following a determination and declaration of emergency, provided certain criteria are met. In the case of the ProFlu-ST, the FDA has only authorized its use for the duration of the emergency, which is currently set to expire on April 26, 2010, unless it is terminated, revoked sooner or renewed.
For the nine-month period, net income declined to $67.76 million or $1.31 per share from $85.81 million or $1.55 per share in the year earlier period. Excluding one-time after-tax charge of $6.26 million or $0.12 per share, non-GAAP net income was $74.02 million or $1.43 per share.
Total revenues for the nine months was $359.43 million, down from $363.55 million last year.
Amongst others in the industry, Becton, Dickinson and Co. (BDX), is scheduled to report its earnings on November 4. Analysts currently expect the company to report earnings of $1.24 per share on revenues of $1.85 billion for the quarter.
Another competitor, Hercules, California- based Bio-Rad Laboratories, Inc. (BIO), is scheduled to report its earnings on November 3. Analysts expect the company to report earnings of $1.06 per share on revenues of $435.62 million for the quarter.
Looking forward to the full year Gen-Probe tightened its GAAP earnings outlook, now expected in the range of $1.77 to $1.79 per share, compared to an earlier expected GAAP earnings to be in the range of $1.73 to $1.85 per share. The company also tightened its non-GAAP earnings estimate to a range of $1.90 - $1.93 per share from a previous range of $1.85 to $1.95..
Full year revenues are now expected to be in the range of $493 - $500 million, compared to prior range of $490 - $503 million.
Analysts currently expect the company to report earnings of $1.88 per share for the year, on revenues of $493.01 million.
Thursday, GPRO closed at $42.58, up $1.01 or 2.43%, on a volume of 1.25 million shares on the Nasdaq. In after hours, the stock gained further and is currently trading at $43.00, up $0.42 or 0.99%.
In the past 52 weeks, the stock trended in a broad range of $30.01 - $49.29, with a three-month average volume of 0.61 million shares.
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