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Applied Biosystems Reports Increased Revenues, Income for Q2 of 2004

This story has been updated from a previous version.

NEW YORK, Jan. 28 (GenomeWeb News) - Applied Biosystems reported increased revenues and earnings for its fiscal year 2004 second quarter today, along with slightly increased R&D spending.


For the period ending Dec. 31, 2003, Applied Biosystems reported revenues of $458.4 million, compared to $444.7 million for the same period a year ago.


The company performed financially as expected, despite some deterioration in the business environment, said Tony White, the chairman of Applera, ABI's parent company, said in a conference call. In his first quarter comments in October, White described ABI's performance as "disappointing."


In December, White said Applera had retained a strategic consultant to conduct an "in-depth review" of ABI's product portfolio. In today's conference call, he said that the review, which the company today said will be completed this fiscal year, is not a cost-cutting exercise.


For the second quarter, revenues in different product categories were as follows (year-ago revenues in brackets): DNA sequencing $170.4 million ($174.8 million), SDS and other applied genomics $104.3 million ($85.4 million), mass spectrometry $103.4 million ($92.6 million), core DNA synthesis and PCR $51.3 million ($51.9), other product lines $29 million ($40 million).


The company's net income for the quarter was $52.4 million, or $0.25 per share, compared to $29.2 million, or $0.14 per share, in the prior year quarter.


Applied Biosystems spent $60.7 million for R&D and engineering during the quarter, compared to $59.2 million the year before.

The company reported cash and cash equivalents of $640 million on hand as of the end of the quarter.


White said the company's Sequence Detection Systems and mass spectrometry businesses experienced "solid growth" and should continue to perform well serving growing markets in basic research and pharmaceutical development.


Mike Hunkapiller, president of ABI, said that revenue growth was impacted by the delay in the passage of the FY 2004 NIH budget, which consequently limited "some customers' capital equipment purchases" in the quarter, he said.


DNA sequencing, he added, was relatively stable in the quarter, with sales of instruments and consumable increasing slightly over the year-ago quarter, while revenues decreased by 3 percent, he said, a decline the company attributed to the absence of a $6.7 milliion licensing fee it had received in the prior-year's quarter.


Globally, he said constrained government funding in Europe, particularly Germany and France, negatively impacted second-quarter sales for the company.


US revenues increased 5 percent for the quarter with the largest factor in that, an increase in sales in the company's 3730xl systems to large-scale genome centers, the company said. European revenues decreased 4 percent, compared to the year-ago quarter, while Asia Pacific revenues increased 9 percent, reflecting a 3 percent increase as a net effect of foreign currency values.


The company will release its new Expression Analysis gene-expression system in Japan for unrestricted sale in the third quarter, and will follow that with a global release in the company's fourth quarter, Hunkapiller said. The company announced the product in July.





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