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Applied Biosystems Issues Lower Earnings Guidance

NEW YORK, March 19 -- There has been a "deterioration of business conditions beyond" previous expectations, Applied Biosystems Group of Foster City, Calif., said this morning in a statement remarkable for its terse observations of the global financial environment.


The group, a unit of  Applera, cited delays in the release of government funding for life science research in the US, Japan and Europe -- one half of the group's revenues come from government or private research organizations -- in addition to macroeconomic issues related to the Middle East. The company earns half of its revenues outside the US.


Companies typically issue statements intended to provide information on their business progress in between financial reporting dates. The efforts are intended as guidance to financial analysts who, collectively, set expectations or standards that are regarded as fiscal mileposts for companies to meet.


Applied Biosystems said it expects lower than previously anticipated revenues and earnings in its third quarter of fiscal 2003, which ends March 31, 2003, and possibly in the fourth quarter.


Michael Hunkapiller, the president of Applied Biosystems, in a statement said that NIH and academic labs are unclear when federal FY 2003 funds appropriated in February will be disbursed. Other government buyers are operating on orders to defer scheduled expenditures. A similar situation is occurring in Japan, as well as Europe, particularly in Germany and France, the company said.


Applied Biosystems earned $49.1 million, or 23 cents a share, on revenue of $409 million for its year-ago fiscal third quarter.


A  survey of 10 analysts following ABI, conducted by Thomson First Call, yielded an earnings estimate of 22 cents a share for the upcoming third quarter. Eight analysts surveyed produced an estimated revenue of $432 million for the third quarter.


The company in January had set expectations of earnings "somewhat higher than 20 cents a share."


At the end of 2002 the company cut about 10 percent of its staff, a layoff of 400 regular positions and 100 contract and temporary positions, in anticipation of deteriorating economic conditions, company officials told GenomeWeb.




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