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Applied Biosystems Revenue Rockets 20% Despite Currency Effect

NEW YORK, Jan 25 – Buoyed by strong sales of its sequencing and mass spectrometry systems, Applied Biosystems reported Thursday revenues of $411 million in fiscal second quarter 2000, a 22 percent increase over revenues of $335.9 million a year ago.

ABI’s revenue increase would have been even greater if not for the effects of a weaker foreign currencies, which weighed down revenues by an estimated $19 million, or 6 percent. With over half of ABI’s revenues coming from outside the US, year-over-year declines in the value of the euro, the British pound, and the Japanese yen hurt revenues stemming from instrument sales.

The company expects strong growth throughout the year, with fiscal 2001 earnings and revenue expected to continue to grow by 20 percent, according to Dennis Winger, chief financial officer of Applera, Applied Biosystems’ parent company.

The “hot products” that fueled this growth included the ABI Prism 3100 DNA Analyzer, the Q-star Pulsar mass spectrometry instrument for proteomics, and the ABI 3900 DNA Synthesizer, as well as reagents and TaqMan oligonucleotides, said Michael Hunkapiller, president of Applied Biosystems.

Strong sales of reagents, including the introduction of the productivity pack of electrophoresis media, chemistry, and data collection software, also contributed to ABI’s revenue growth, said Hunkapiller.

During the quarter, ABI signed a number of consumables-related deals, including an agreement to jointly develop protoemics sample preparation consumables with Millipore; a licensing deal for ICAT proteomics reagents; and a deal with Geneva Proteomics to become the first ICAT customer. But these collaborations did not signal a shift away from instruments, said Hunkapiller. 

Reagent sales have not changed fundamentally over the years,” he said. “Just slightly over half of our business is equipment purchases. About one third is consumables and the remainder is royalties on software service contracts.”

“Currently, ICAT reagents are in field trials,” Hunkapiller added.

Research and development expenditures rose to $42 million compared with $31.3 million for the year-ago quarter. But the company’s sales expenses diminished to $94.8 million from $105.9 million in the second quarter of last year.

Net earnings for the quarter totaled $58 million, or 26 cents per diluted share, compared with $43.8 million, or 20 cents a diluted share, a year ago, beating Wall Street’s expectations by a penny, according to a survey of 16 brokers conducted by FirstCall/Thomson financial.

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