NEW YORK, Oct. 24 - Applied Biosystems today reported that strong demand for its mass spectrometers helped drive overall growth in revenue for its fiscal first quarter. But a $16.4 million charge related to a $13.3 million jury verdict contributed to a dip in net earnings during the quarter.
For the period ended Sept. 30, ABI said total revenues increased to $395.9 million from $366.6 million in the first quarter 2002. Sales of its mass-spec instruments accounted for $83.4 million of that total, an increase of 54 percent over last year's receipts for the tools.
ABI added that sales of its newer SDS reagents and other applied-genomics revenue increased 21 percent this quarter from the first quarter 2002, accounting for $83.5 million of the company's total revenues for the period. However, its core DNA synthesis and PCR business fell 17 percent in the first quarter 2003 from last year, accounting for $49 million of total first-quarter revenue.
DNA sequencing, which ABI appropriated from Celera in April, fell by 1 percent, and accounted for $149.3 million of the period's revenue. "Other product lines," which fell by 10 percent this quarter from the same period last year, made up $30.7 million of first-quarter 2003 revenue, ABI said.
R&D spending in the quarter increased to $61 million from $52 million in the first quarter 2002, and SG&A tipped up by $6.5 million to reach $98.3 million in the current quarter.
Additionally, the Applera unit was hit with a $13.3 million jury verdict earlier this month from a patent-infringement case going back to Perkin Elmer. However, that figure may increase from interest and potential "additional damages," the company said. ABI also took a $16.4 million charge to discontinued operations (the technology was sold in 1999, a company spokeswoman said).
Consequently, net income fell to $17.8 million, or $.16 per share, from $32.2 million, or $.15 per share, year over year.
ABI said it had around $461 million in cash and short-term investments as of Sept. 30.
"First-quarter results demonstrate that our aggressive investments in R&D are working, and as a result, we expect continued revenue growth for the balance of this fiscal year," said Tony White, CEO of Applera.
Michael Hunkapiller, president of ABI, added: "Strong early adoption of new ... sequencing product lines ... by the major academic genome centers suggests that we have turned the corner on declines in our sequencing product line. We anticipate that the lower operating costs of the ABI 3730 DNA analyzer product line are likely to lead to more sequencing and related applications using DNA electrophoresis technology, which should be positive for ABI's sequencing prospects."
"In the first quarter we saw strong growth in the SDS product category as we did in previous quarters, and exceptional growth in the mass spectrometry category," Hunkapiller said. "While the performance of our mass spectrometry product lines indicates our success in both the proteomics and the drug metabolism and pharmacokinetics markets, we would expect to see the growth rates in mass spectrometry moderate over the next few quarters."