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Drop in Instrument Sales Weighs on ABI s Q4 Revenues

NEW YORIK, July 26 - Applied Biosystems on Thursday reported a 3.4 percent increase in fiscal fourth quarter revenues to $405.1 million, compared with $391.8 million in the year ago quarter as a drop in instrument sales offset higher sales of consumables and services.

The company posted a 12 percent drop in revenue from the sale of instruments, including software to $191.4 million from $216.9 million in the year ago period.

Earlier this quarter, ABI of Foster City, Calif., announced that it expected a drop in instrument revenues as the result of a drop in demand from commercial buyers who were tightening their belts in light of the slowdown in the economy. 

"Fourth quarter results reflect the several factors we have discussed for several months, specifically the slowdown in capital equipment purchases that has now been reported by a number of life science toolmakers, a product transition in part of the Applied Biosystems mass spectrometry line, the comparison to a peak period of shipments of 3700s last year, and the negative impact of currency,” Tony White, CEO of ABI’s parent company Applera, said in a statement.

“We expect these factors will continue to restrain revenue growth for the next few quarters,” he said.

ABI said that in the fourth quarter, the company said revenues took an $8 million hit as a result of the unfavorable foreign currency rates.

Sales of consumables were up 26 percent in the fourth quarter to $158.3 million, compared with $125.6 million in the year ago period, while revenues from other sources, including service contracts, royalties, licenses, and contract research, rose 12 percent to $55.4 million.

For fiscal year 2001, ABI posted revenues of $1.6 billion, compared with $1.4 billion in fiscal year 2000.

Research and development expenditures rose 17 percent to $48.9 million as ABI invested in several new products as well as in the developing its oligonucleotide production capabilities in anticipation of an expected jump in demand for assays for gene expression and SNPs.

For the fourth quarter, net income dropped 16 percent to $47.6 million, or 0.22 cents a diluted share, compared with $56.6 million, or 26 cents a diluted share, in the year ago period.

For the year, ABI posted net income of $212.4 million, 96 cents a diluted share, compared with $186.2 million, or 86 cents a diluted share.

ABI said it expects to see stronger sales and earnings growth during calendar year 2002, although lower growth rates are anticipated for the first three quarters of fiscal year 2002.

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