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ABI's Sequencing Unit Slides and Mass Spec, PCR Swell as Fiscal Q4 Organic Revenue Grows 6 Percent

NEW YORK (GenomeWeb News) — Applied Biosystems today said that fiscal fourth-quarter revenue increased 9 percent as real-time PCR and mass spec jumped and DNA sequencing slid.
 
ABI said total net revenues for the three months ended June 30 increased to $523.1 million from $478.5 million during the similar period in 2005.
 
Excluding the impact of ABI’s March 2006 acquisition of the Ambion research products division, revenues for the fourth quarter increased 6 percent over the year-ago period. The company reported $14.9 million of Ambion-related revenues for the period ended June 30.
 
Sales reported by ABI’s real-time PCR and applied genomics segment jumped 23 percent to $169.7 million from $138.5 million.
 
Sales from ABI’s DNA sequencing segment slid around 4 percent to $137.8 million while the company’s mass spectrometry unit grew 13 percent to $134.7 million year over year.
 
Revenues from ABI’s core PCR and DNA synthesis unit increased 12 percent to $51.7 million as sales of “other” products declined 7 percent to $29.2 million.
 
ABI’s R&D spending for the fourth quarter of 2006 declined to $46.3 million from $48.2 million in the fourth quarter of 2005.
 
Profits for the fourth quarter grew to $76.7 million from $71.6 million year over year.
 
ABI said three main items affected the comparability of results for the fourth quarters of both 2006 and 2005, increasing pre-tax income by $14 million. Items for the fourth quarter of 2006 included a $16.9-million pre-tax gain from the sale of an ABI-owned facility, amortization of expense of $2.9 million related to acquired intangibles, and a $1.4-million favorable tax adjustment to a previously recorded charge in the second quarter of the firm’s 2006 fiscal year.
 
Items affecting the fourth quarter 2005 included pre-tax items that decreased income before taxes by about $20.5 million. The company also recorded fourth-quarter 2005 tax benefits of $23.5 million related to US R&D credit carryforwards, the expected results of Canadian examinations, and the settlement of UK tax matters, the company said.
 
Looking ahead, ABI said it believes that fiscal 2007 revenue to grow in the mid- to high-single digits. This outlook includes the full fiscal year impact from the Ambion acquisition and currency effects.
 
Revenues are expected to increase for both instruments and consumables during fiscal 2007, which began July 1, ABI said. Specifically, the company expects revenue from RT-PCR/applied genomics and mass spectrometry products to grow and receipts to decline from its core PCR and DNA synthesis and “other” product segments.
 
Revenues in the DNA sequencing product category are expected to remain flat compared with fiscal 2006.

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