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Investment Bank Upgrades Affy Stock In Wake of Expected Revenue Shortfall

NEW YORK, Sept. 28 (GenomeWeb News) - An investment bank today upgraded Afymetrix's stock one day after the company said "low initial-production yields" of its 500K Mapping Array Set will result in a revenue shortfall of as much as 13 percent.

 

The bank, Robert W. Baird, upgraded Affy shares to "neutral" from "underperform."

 

As GenomeWeb News reported, Affy disclosed that it expects to post a revenue shortfall of between $10 million and $12 million for the quarter ended Sept. 30, or as much as 13 percent below its previous guidance of $92 million in product-related revenues for the quarter.

 

In a conference call following the announcement Tuesday evening, Greg Schiffman, Affy's senior vice president and CFO, said the company had a "little bit of a hiccup with our ability to ramp production and get yields to where we need to have them" during the quarter. He said that the manufacturing issue affected only the 500K chip.

 

"While we have recently seen improving yields, these improvements occurred late in the quarter and we now project that we will be unable to manufacture enough product to meet our revenue target," CEO Stephen Fodor said in a statement.

 

Affymetrix officials said during the conference call that they plan to expand the company's manufacturing plant in Sacramento, Calif., by 60 percent through 2006, and that they also plan to open a new plant in Singaporenext year.

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