NEW YORK, April 10 – Shares of Molecular Devices plunged 58 percent on Tuesday in the first trading session after the company announced disappointing earnings, which it attributed to the economic downturn.
The company’s shares closed down $28.99 at $21 on the Nasdaq.
On Monday, after the close of trading, Molecular Devices of Sunnyvale, Calif., announced first quarter net income of $1.64 million, or 10 cents per diluted share, compared with net earnings of $1.19 million, or eight cents a diluted share, in the year-ago period. Analysts surveyed by FirstCall/Thomson Financial had expected earnings of 20 cents a share.
Molecular Devices, a maker of systems designed to automate drug discovery tasks, attributed the shortfall to the current economic downturn, saying customers delayed orders for equipment as a result of the market uncertainty.
“We believe that the first quarter of 2001 was negatively impacted by the current economic environment,” CEO Joseph Keegan said in a statement. "We typically experience a large number of orders closing near the end of the quarter, and our order data late in the quarter suggests that a number of our pharmaceutical and biotechnology customers may have delayed or postponed purchasing decisions as a result of the current economic uncertainty.”
Last month, Applied Biosystems cut its anticipated short-term growth to one-half to two-thirds of its long-term target of 20 percent due to the current economic uncertainty and a stronger dollar. Applied Biosystems said at the time that some unnamed customers were cutting back on orders for its ABI 3700 sequencers due to fears about the market conditions.
But other companies have indicated expectations for continued strong growth despite the downturn. On Monday mass spectrometer specialist Bruker Daltonics said its first quarter earnings were in line with previous expectations.
“We are pleased to report that we see no evidence of a slow-down for the systems we provide to the life-science research and drug discovery markets,” said Frank Laukien, Bruker’s CEO, in a statement. “Our life science systems new order bookings for the first quarter have increased more than 30 percent compared to the first quarter 2000, which supports our long-term expectation of top-line product revenue growth 25 percent, with 2001 product revenue expected to grow at approximately 28 percent.”
Molecular Devices, which reported first quarter revenues of $20.7 million, up three percent from the corresponding period a year ago, also lowered its second-quarter and full-year estimates.
The company said it expects second-quarter revenues of $26 million to $28 million and fully diluted earnings of 16 to 18 cents a share. For the year, Molecular Devices anticipated revenues of $105 million to $110 million and fully diluted earnings per share of 70 to 80 cents.
Wall Street analysts had previously projected second quarter earnings of 27 cents a share and full-year earnings of $1.22 a share.