Molecular diagnostic products company Myriad Genetics Inc. (MYGN), Tuesday reported a rise in profit for the second quarter of fiscal 2010, helped by a 11% rise in revenues due primarily to increased sales and marketing efforts that improved physician acceptance and adoption of the company's products. Both earnings and revenue came ahead of analysts' predictions. Following the results, MYGN shares are trading up more than 7% in the after hours.
The Salt Lake City, Utah-based company's net income for the second quarter was $35.36 million or $0.36 per share, compared to $21.20 million or $0.22 per share in the same quarter of the previous year. Results for the quarter include a loss of $15.6 million from discontinued operations related to the company's former research and pharmaceutical businesses.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share on. Analysts' estimates typically exclude special items.
Income from continuing operations for the quarter was $35.36 million or $0.36 per share, compared to $36.75 million or $0.40 per share last year.
Revenues rose 11% to $92.77 million from $83.95 million in the prior-year quarter. Analysts expected revenues $91.62 million for the quarter. Myriad attributes this growth primarily to increased sales and marketing efforts that improved physician acceptance and adoption of the company's products.
In the preceding first quarter, the company reported a significant rise in profit, primarily due to a 22% growth in molecular diagnostic revenues as a result of its ongoing increased sales and marketing efforts during the later part of the quarter. Net income for the first quarter was $30.44 million or $0.31 per share, compared to $14.45 million or $0.15 per share in the year-ago quarter. Molecular diagnostic revenues for the quarter increased 22% to $85.12 million from $69.97 million in the prior-year quarter.
Total costs and expenses increased to $58.25 million from $50.63 million last year. Gross profit margin increased to 88% for the second quarter, compared to from 87% in the first quarter of fiscal 2010 due to continued efficiency improvements in the company's molecular diagnostics laboratory.
"Improvements in the overall economy as well as recent Company-specific strategic initiatives, allowed us to generate solid year-over-year revenue growth and a return to sequential revenue growth," said Peter Meldrum, president and chief executive officer of Myriad Genetics.
Research and development expense increased 11% to $5.1 million for the quarter primarily due to additional R&D expenditures in support of the company's internal product pipeline and in preparation for the expected launch of two new molecular diagnostic products in this calendar year.
Selling, general and administrative expense for the second quarter increased 20% to $42.1 million, primarily attributable to costs associated with increased revenue growth, such as expansion of the company's sales force to 300 from 250 persons, support of its direct-to-consumer marketing campaigns in the Mid West and South regions and expansion of its physicians speakers programs.
During the second quarter, days sales outstanding for Myriad's accounts receivable was 47 days.
Among the others in the industry, Medical imaging systems maker Hologic, Inc. (HOLX), Monday reported net income of $26.10 million or $0.10 per share, compared to $38.16 million or $0.15 per share in the same quarter last year. Hologic's revenues decreased 3.9% to $412.45 million from $429.23 million in the year-ago quarter.
For the six-month period, net income increased to $65.80 million or $0.66 per share from $35.66 million or $0.39 per share in the previous year. Total revenue for the period rose to $177.89 million from $153.92 million a year ago.
Further, Myriad said that Mark Skolnick has elected to step down as a member of Myriad's board on February 2. Skolnick will remain with the company as a part-time employee in the capacity of senior scientist emeritus and scientific visionary.
Greg Critchfield, president of the company's wholly-owned subsidiary, Myriad Genetic Laboratories, will retire on March 1, to devote his time and efforts to his many philanthropic pursuits.
In addition, Mark Capone, chief operating officer for Myriad Genetic Laboratories, will succeed Critchfield as the new President of Myriad Genetic Laboratories.
MYGN closed Tuesday's regular trading at $23.98, up 0.20 or 0.84%, on a volume of 2.73 million shares on the Nasdaq. In after hours, the stock further gained 1.77 of 7.38%, trading at $25.75. In the past 52-week period, the stock traded in a range between $22.06 and $24.15, on a 3-month average volume of 1.54 million shares.
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