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ABI's Sequencing Revenue Inches Up 3 Percent in Fiscal Q3 as Profit Tumbles 40 Percent

NEW YORK (GenomeWeb News) — Applied Biosystems today said fiscal third-quarter 2007 revenues increased 8 percent as R&D spending rose 13 percent and profit tumbled 40 percent.
Total receipts for the three months ended March 31 increased to $529.9 million from $490.7 million year over year. 
ABI said that sequencing revenue ticked up 3 percent to $140.7 million; RT-PCR sales increased 13 percent to $183.3 million; mass spec sales increased 12  percent to $127.3 million; core PCR and DNA synthesis dropped 9 percent to $47 million; while “other” products declined rose 20 percent $31.7 million.
Applera CEO Tony White said the company is seeing “good progress,” and he highlighted the growth in the sequencing, PCR, and mass spec sales.
White also said the company  “continue[s] to see high growth in the applied markets of human identification and quality and safety testing and in the emerging categories.”  
R&D spending in the quarter increased to $54.4 million from $48 million year over year.
ABI said profit in the quarter fell to $75.5 million from $124.4 million in the year-ago period.
The company said it expects “high single digit to low double digit” revenue growth for fiscal 2007. During the third quarters of both fiscal 2007 and 2006, ABI recorded items that affected the comparability of results. For the third quarter of fiscal 2007, the company recorded pre-tax items attributable to amortization expense related to acquired intangibles that decreased income before taxes by approximately $2.8 million.
In the third quarter of fiscal 2007, ABI said it recorded a tax benefit of $8 million primarily resulting from a $6.1-million valuation allowance release that resulted from management's reassessment of the future realization of foreign tax credits. Alternative and actual tax filing positions accounted for the remaining tax benefits of $1.9 million.
During the third quarter of fiscal 2006, ABI recorded pre-tax items that decreased income before taxes by approximately $5.4 million. These items included a net charge of $1.6 million related to the resolution of legal disputes; a pre-tax charge of $3.4 million to write off the value of acquired in-process R&D in connection with the acquisition of Ambion; a charge of $1.3 million attributed to amortization expense related to acquired intangibles; and a favorable pre-tax adjustment of $900,000 for a previously recorded asset impairment. The period also included tax benefits of $63.3 million related to a completed IRS exam, a state valuation allowance reversal, and research and development credits.
ABI did not disclose its balance sheet for the period.

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