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Affymetrix Posts Flat Q2 Revenues, Lowers Full-Year Forecast

This article has been updated from a previous version to include a stock quote.
NEW YORK (GenomeWeb News) - Affymetrix today lowered its full-year revenue forecast for the second time this year as it reported a 1.5 percent dip in second-quarter revenues to $86.9 million from $88.3 million in the comparable period of 2007.
 
Second-quarter product revenue rose 9.6 percent to $75 million from $68.4 million in the year-ago period. For the current quarter, array and reagent sales generated revenue of $68.9 million and instrument sales contributed $6.1 million. Affy said it shipped 22 GeneChip systems in the quarter.
 
Service revenue fell 25 percent to $9 million from $12 million in the second quarter of 2007, while royalties and other revenue dropped 63 percent to $2.9 million from $7.9 million.
 
Affy reported a net loss of $3.6 million, or $0.05 per diluted share, in the second quarter of 2008, which includes a pretax restructuring charge of $900,000, or $0.01 per diluted share. In the year-ago period, the company posted net income of $1.2 million or $0.02 per diluted share, which included a pretax restructuring charge of $1.8 million, or $0.03 per diluted share.
 
R&D spending was nearly flat at $19.6 million compared to $19.4 million in the second quarter of 2007, while SG&A costs decreased by 12 percent to $29.6 million from $33.6 million in the prior-year period.
 
The company also lowered its full-year forecast due to “predicted ongoing weakness” in pharmaceutical revenue. As a result, Affy now expects 2008 revenue to be in the range of $455 million to $460 million, including a $90 million payment from Illumina related to litigation between the firms.
 
The company had already lowered its revenue forecast for fiscal 2008 revenues to between $490 million and $510 million from an initial forecast of between $505 million and $525 million.
 
As of June 30, Affy had $326 million in cash and cash equivalents.
 
The company also disclosed today that it has purchased a company that is developing microparticle technology for use in diagnostic applications and that it has decided to close its West Sacramento, Calif., manufacturing facility.
 
In mid-morning Friday trading, Affy's shares were down 23 percent at $8.00.

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