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Affymetrix Q1 Revenues Rise 7 Percent on Increased Product Sales

NEW YORK (GenomeWeb) – Affymetrix reported after the close of the market today first quarter revenue growth of 7 percent, an increase the company attributed to the strong performance of its genotyping and reproductive health business.

For the three months ended March 31, the company's revenues increased to $88.7 million from $83 million in the year-ago quarter. On a constant currency basis, its revenues increased 9 percent year over year, and beat the average Wall Street estimate of $86.8 million.

Its product revenues climbed more than 7 percent to $79.4 million, including $76.5 million in revenues from consumables and $2.9 million from instrument sales. Services and other revenue was $9.4 million, up slightly from $9.3 million for Q1 2014.

During a conference call following the release of the results, Affymetrix President and CEO Frank Witney noted that revenues from the firm's genetic analysis business — its "primary growth driver" — increased 22 percent over last year and accounted for 42 percent of total sales.

Genotyping revenue was up 27 percent over the first quarter of 2014 to $18.8 million, an improvement driven by partnering on large biobank projects and growing revenues from ag-bio applications of Affy's technology, he said.

"We're in active discussions on new biobank projects and we see an interesting pipeline of opportunities," Witney noted. "For example, I'm pleased to announce that we just won another competitive biobank tender from which we expect to begin recognizing revenue in the second half of the year."

Ag-bio revenues, meanwhile, have grown to account for about 25 percent of Affy's total genotyping revenues, he added.

Witney also highlighted the positive impact of Affy's reproductive health products on its financial performance, noting that in the first quarter the company's cytogenetics business grew approximately 13 percent over the same period the year before. He also said that the firm is now focusing on expanding its CytoScan post-natal cytogenetics product internationally, as well as growing its use for pre-natal and oncology research applications.

Affy's eBioscience core flow cytometry and immunoassay business grew by nearly 6 percent on a reported basis in the first quarter, Witney said, while revenues from its life science reagents business decreased by roughly 4 percent.                                          

Affy's Q1 net income was $4.4 million, or $.06 per share, versus a net loss of $10.5 million, or $.14 a share, for the first quarter the year before. Its non-GAAP EPS was $.10, easily surpassing analysts' average estimate of $.04 per share.

The firm's R&D spending jumped 4 percent to $12.1 million from $11.6 million, while its SG&A expenses dropped around 8 percent year over year to $35.4 million from $38.6 million. Last year's Q1 results also included a litigation settlement expense of $5.1 million, which was not repeated in Q1 2015.

At the end of the first quarter, the firm had cash and cash equivalents totaling $104 million.

During the conference call, Affymetrix CFO Gavin Wood said that while Affy has had a strong start to the year with its genetic analysis and eBioscience businesses performing at the upper end of its expectations, "it's early in the year, and we believe that it is prudent to maintain our current guidance" of full-year mid-single-digit revenue growth on a constant currency basis.