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Affymetrix Q2 Revenues Grow 4 Percent

NEW YORK (GenomeWeb) - Affymetrix reported after the close of the market Wednesday second quarter revenue growth of 4 percent, driven by increases in product revenues and in its genetic analysis business.

For the three months ended June 30, the company's revenues increased to $89 million from $85.4 million in the year-ago quarter. On a constant currency basis, its revenues increased almost 8 percent year over year, and beat the average Wall Street estimate of $88.6 million.

Its product revenues climbed more than 5 percent to $79.9 million from $75.9 million, and included $76.1 million in consumables revenues and $3.8 million from instrument sales. Service and other revenue was $9.1 million, down 5 percent from $9.6 million in Q2 2014.

During a conference call following the release of the results, Affymetrix President and CEO Frank Witney noted that genetic analysis revenues drove a profitable quarter for Santa Clara, California-based Affymetrix, increasing 7 percent versus the prior year period and accounting for 41 percent of total sales. The firm's eBioscience business also saw growth of over 2 percent, comprising 27 percent of revenues.

Genotyping revenue was down 3 percent over Q2 2014 to $17.2 million, attributable to a "tough quarter in Europe," Witney said, adding that ag-bio revenues showed 24 percent growth in the quarter compared to the prior-year period.

The firm noted that it added to its genotyping business with the recent acquisition of Eureka Genomics for $15 million in cash.

The company's cytogenetics business grew approximately 12 percent over the same period last year. Witney said there are multiple ways the firm would like to expand the business. Affymetrix recently converted two European reference labs to CytoScan and China has been a "growth driver." Expansion into pre-natal testing, hematology, and oncology were other ways the firm could grow the market for CytoScan arrays.

Sales for Affymetrix's eBioscience business grew over 2 percent with the core flow cytometry and immunoassay business growing by nearly 6 percent, Witney said, and revenues from life science reagents increasing by 4 percent compared to the prior-year period.          

Affymetrix's Q2 net income was $7 million, or $.08 per share, versus a net loss of $911,000, or $.01 per share, in Q2 2014. Its non-GAAP income was $10.5 million, or $.12 per share, beating analysts' average estimate of $.07 per share.

The firm's R&D spending was flat at $12.9 million, while its SG&A expenses dropped about 1 percent year over year to $35.6 million from $36.3 million. The firm had $1.5 million in litigation charges in Q2 2014, but recorded only $44,000 for such charges in Q2 2015.

At the end of the second quarter, the firm had cash and cash equivalents totaling $119.6 million.

The firm reiterated its 2015 guidance for mid-single-digit growth on a constant currency basis.

In Thursday morning trade on the Nasdaq, shares of Affymetrix were down around 3 percent at $10.62.