Tuesday, Techne Corp. (TECH) reported a higher profit for second-quarter, as sales increased in its Biotechnology segment and gross margins improved in Biotechnology and Hematology segments. However, reported earnings for the quarter fell short of Street estimates.
The Minneapolis, Minnesota-based company's second-quarter net income increased 4.6% to $24.7 million or $0.66 per share from $23.6 million or $0.62 per share a year ago. Techne attributed the increase in net earnings to increased sales in the Biotechnology segment, improved gross margins, and lower selling, general and administrative expenses. On average, four analysts polled by Thomson Reuters estimated earnings of $0.68 per share for the second quarter. Analysts' estimates typically exclude special items.
Foreign currency fluctuations also affected net earnings for the second quarter. The change in exchange rates used to convert foreign currencies, primarily British pound sterling and euros, to U.S. dollars increased net earnings by $572 thousand or $.01 per share for the second quarter of 2009 as compared to the same period last year.
Revenues for the second quarter increased 5.9% to $65.5 million from $61.88 million in the second quarter of 2008. Analysts expected revenues of $67.31 million for the quarter. Consolidated net sales were positively affected by the strength of the U.S. dollar as compared to foreign currencies. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 1.6% for the quarter from the comparable prior-year period.
Consolidated gross margin for the second quarter was 79.7%, compared to 78.3% for the quarter ended December 31, 2008. The increase in gross margin is mainly the result of improved margins in the Biotechnology and Hematology divisions due to incremental profit on increased sales volumes.
Biotechnology net sales, which include sales by Research and Diagnostic Systems' biotechnology division, R&D Systems China and BiosPacific, rose 5.2% to $42.4 million for the quarter. North American biotechnology sales to industrial pharmaceutical and biotechnology customers increased 5.7% during the second quarter. Biotechnology sales to academic, Pacific Rim distributors, and China grew 4.5%, 13% and 21.8%, respectively, in the second quarter.
R&D Europe's net sales for the quarter increased 8.6% to $18.8 million from the same prior-year period. Hematology net sales for the quarter rose 1.5% to $4.3 million compared to the second quarter of 2008.
Research and development expenses for the quarter increased 9.3% to $545 thousand from the prior-year quarter, as a result of continuous development and release of new biotechnology products.
For the six months ended December 31, 2009, Techne's consolidated net earnings decreased 1.4% to $51.5 million or $1.38 per share from $52.2 million or $1.36 per share in the six months ended December 31, 2008. The decrease in consolidated net earnings was the result of lower interest income offset by slightly improved gross margins and lower selling, general and administrative expenses. Net sales for the six months increased 0.7% to $132.1 million from the year-earlier period.
TECH is losing $1.78 or 2.69%, and is trading at $64.40 on a volume of 71 thousand shares on Nasdaq.
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