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Beckman Coulter's Q2 Revenues Increase 19 Percent; Misses Estimates

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Beckman Coulter reported after the close of the market Thursday that its second-quarter revenues increased 19 percent year over year, aided by its acquisition last August of Olympus Diagnostics.

The firm reported total revenues of $902 million for the three-month period ended June 30, up sharply from $756.7 million. The Q2 2010 results include a contribution of $116.6 million from the Olympus Dx business. Excluding that contribution, Beckman Coulter's revenues were up 3 percent on a constant currency basis, it said.

The revenues fell short of analysts' consensus estimate of $929.7 million for the quarter.

Investors punished the firm for the miss and a forecast that was below expectations, sending Beckman's shares down 22 percent to $46.64 in early Friday trade on the New York Stock Exchange.

"First half 2010 results largely met our expectations, but quality challenges in the US market, weakness in demand from life science markets and reduced expectations for our cellular business, lead us to lower revenue and earnings expectations for the full year," Scott Garrett, chairman, president and CEO of Beckman Coulter, said in a statement. "Although we continue to gain new customers in the US, partially offsetting accounts lost, recurring revenue in the US is expected to be relatively flat until our quality challenges are behind us."

During the quarter, Beckman disclosed a positive bias for its AccuTnl troponin test kits that run on its UniCel DxI immunoassay system and said it would remove the tests from that system as of May 31. The firm said last month that it is planning to conduct a prospective clinical study and to submit two separate 510(k) submissions to the FDA for the troponin test in the first half of 2011 — one for its Access instruments and one for its DxI instruments.

"We have identified root causes and developed remediation plans," said Garrett. "Implementation is underway with some projects continuing through 2011."

For the second quarter of 2010, Beckman Coulter's diagnostics division had 23 percent revenue growth year over year to $795.5 million from $647.8 million. Within that division, its chemistry and clinical automation business had 53 percent sales growth to $333.9 million from $218.7 million; its cellular analysis unit had a 6 percent sales increase to $239.2 million from $226.4 million; and its immunoassay and molecular diagnostics business brought in sales of $222.4 million, up 10 percent from $202.7 million.

Beckman's life sciences division had revenues of $106.5 million, down 3 percent year over year from $108.8 million.

The firm posted a profit of $44.6 million, or $.63 per share, compared with $60.8 million, or $.94 per share, for Q2 2009. The firm's operating expenses were nearly $37 million higher for the second quarter of 2010 compared to the prior year period.

Beckman's R&D spending increased to $63.9 million from $60.7 million, while its SG&A spending rose to $226.8 million from $191.2 million. The firm took a charge of $13.9 million for amortization of intangible assets compared to $7.5 million for such charges in Q2 2009. Its restructuring and acquisition-related costs declined to $13 million from $21.6 million.

The firm finished the quarter with $268.5 million in cash and cash equivalents.

Beckman expects total 2010 revenues of between $3.65 billion and $3.70 billion, and EPS of between $3.90 and $4.00. Analysts, on average, had expected revenues of $3.76 billion and EPS of $4.36 for the year.

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