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Immucor Q3 Profit Rises; Lifts FY10 Outlook - Update

BLUD 03312010

Blood-test equipment maker Immucor, Inc. (BLUD), Wednesday reported a slight increase in its third quarter profit, as revenues rose primarily due to price contributions and currency. Earnings for the quarter beat estimates by a penny, while revenues came in short of expectations. Looking ahead, Immucor also revised its full year 2010 earnings and revenues forecast from its prior guidance.

Quarterly net income of Norcross, Georgia-based Immucor improved to $20.06 million or $0.28 per share from $19.46 million or $0.27 per share in the same quarter a year ago.

On average, 8 analysts polled by Thomson Reuters currently expected earnings of $0.27 per share for the quarter. Analysts' estimate typically exclude one-time items.

The impact from the Quality Process Improvement Project was approximately $0.02 per share, net of tax, in the current year quarter, compared with approximately $0.01 per share, net of tax, in the prior year quarter.

Revenue increased 7% to $80.50 million from $75.31 million in the prior-year quarter, just short of Street estimates of $80.93 million.

Revenue benefited primarily from price contributions and currency. Volume contribution from reagents was negatively impacted by fewer ship cycles, as well as sales mix. Fluctuations in foreign currency exchange rates favorably impacted revenue by approximately $1.8 million, as compared with the third quarter of fiscal 2009.

Sequentially, in the second quarter, Immucor reported a 14% increase in quarterly profit, as sales increased, benefiting from both price and volume contribution. Net income was $19.7 million or $0.28 per share, while sales rose 13% to $82.57 million.

For the quarter under review, gross margin was 69.2% compared with 71.4% in the prior year quarter. Current quarter gross margin was negatively impacted by the costs related to the company's Quality Process Improvement Project of approximately $1.8 million, compared with expenses of approximately $0.6 million in the prior year quarter.

Total operating expenses was $24.84 million, compared to $24.49 million in the year-earlier quarter. Income from operations improved to $30.87 million from $29.30 million in the same quarter last year.

Amongst others in the industry, Bio-Rad Laboratories, Inc. (BIO, BIO.B), in its fourth quarter, reported a turn to profit helped by higher sales. Fourth quarter profit was $37.86 million or $1.35 per share, with net sales of $495.07 million.

For the nine-month period, Immucor's net income was $61.10 million or $0.86 per share, up from $56.75 million or $0.80 per share in the year-ago period. Net sales rose to $246.14 million from $221.51 million in the prior-year period.

Looking ahead to full year 2010, Immucor said it now expects earnings in a range of $1.14 to $1.16 per share, while Street analysts' currently expect earnings of $1.15 per share. Previous forecast was in the range of $1.10 to $1.17 per share.

Earnings forecast includes approximately $0.05 per share impact, net of tax, related to the Quality Process Improvement Project and a full year of BioArray expenses. BioArray was acquired on August 4, 2008.

Consolidated revenue for the year is expected to be in a range of $326 million to $330 million and consolidated gross margins in the middle of the previous guidance range of 70.0% to 71.5%. Analysts' currently expects revenues of $330.81 million for the year. Earlier forecast was in the range of $322 million - $332 million.

On January 21, 2010, brokerage Jefferies & Co initiated a 'Hold' rating on Immucor shares, with a mean target of $23.13.

BLUD closed Wednesday's regular trading at $22.39, up $0.38 or 1.73%, on a volume of 0.65 million shares. In the last 52-week period, the stock traded in a range of $11.24 - $25.95, with a three-month average volume of $0.44 million shares.

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