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Affymetrix Shares Dive on Lowered FY2008 Revenue Forecast

This article has been updated to include information on Affymetrix's stock movement.
 
NEW YORK (GenomeWeb News) – Shares of Affymetrix tumbled 36.5 percent to a new 52-week low in early Tuesday trade after the firm disclosed late yesterday afternoon that it expects its full-year 2008 revenue to be approximately 3 percent lower than the amount it previously forecast.
 
The Santa Clara, Calif.-based microarray firm lowered its revenue projection to a range of between $490 million and $510 million from its previous guidance of between $505 million and $525 million, which it made during its fourth-quarter 2007 conference call in January.
 
Investors fled the stock overnight and this morning, pushing the firm's shares down $5.96 to $10.37 in Nasdaq trading.
 
“This reduction in revenue expectations for the full year is primarily the result of expected lower research spending by pharmaceutical and industrial customers,” Affymetrix said in yesterday's statement. “The company is currently reviewing ways to further reduce operating expenses to offset the impact of this revenue reduction.”
 
Affymetrix also said that it expects first-quarter revenue to be roughly $170 million, which includes a $90 million payment from Illumina to settle litigation between the firms. Analysts had predicted the firm would report revenue of around $182.5 million, including the payment.
 
Affymetrix disclosed in a filing with the US Securities and Exchange Commission at the end of February that it would move the “majority” of its probe array manufacturing from its West Sacramento, Calif., facility to its Singapore facility by the end of 2008 as part of an ongoing effort to reduce costs.
 
The firm will release its first-quarter results after the close of the market on April 24.

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