The story has been revised to reflect changes made by Life Technologies to its third-quarter revenue and EPS figures as a result of a $48.6 million verdict against the company.
NEW YORK (GenomeWeb News) – Life Technologies reported after the close of the market on Thursday that its third-quarter revenues slid 2 percent year over year, though it beat consensus Wall Street estimates on the top and bottom line.
For the three months ended Sept. 30, revenues totaled $911.2 million, down from $928.2 million a year ago, but still above the average analyst estimate of $908.5 million. Excluding currency effects, revenues rose a little more than 1 percent year over year, the Carlsbad, Calif.-based company said.
During the third quarter Life Tech's Research Consumables business group saw revenues slide 3 percent year over year to $384 million. Excluding currency effects, revenues were up 1 percent as result of growth in cell culture products, sample preparation products, and benchtop instruments.
Genetic Analysis revenues retreated 1 percent, but grew 2 percent excluding currency effects, driven by increased sales of the Ion Torrent platform. That was offset, though, by an expected decline in the sale of SOLiD instruments and lower CE instrument sales from one-time orders in the year-ago period and the timing of sales, Life Tech said.
The Ion Proton platform began shipping in September and in the third quarter, Life Tech shipped more than 100 systems, Life Tech Chairman and CEO Greg Lucier said on a conference call following the release of the financial results. "The latent demand for Proton is more significant than we originally anticipated," he said.
Applied Sciences revenues, meanwhile, were flat at $174 million. Excluding currency effects, revenues increased 3 percent, primarily due to forensics and increased sales of qPCR applied sciences instruments. CE instrument sales offset that growth, though, resulting from one-time orders from a year ago and an expected decline in BioProduction sales, which tend to fluctuate quarter to quarter, the company said.
CFO David Hoffmeister said on the call that Life Tech's qPCR royalties declined about $3 million year over year compared to an expected decline of between $7 million to $8 million as the company offset declines with additional royalty licensing programs.
During the quarter the company saw stronger growth in the emerging markets and slower growth in the mature markets, Lucier said. Life Tech continues to see macroeconomic conditions negatively affecting its European business, while in the US it is experiencing "some pullback in spending as awareness of potential cuts to" the National Institutes of Health "become more widespread," he said.
In reaction, the company continues to cut costs, including a reduction in discretionary spending, and for 2012 Lucier said the company expects organic growth of about 2 percent.
Life Tech's R&D costs in the quarter decreased 18 percent to $84.8 million from $103.9 million, while its SG&A costs increased 7 percent to $270.6 million from $251.8 million.
The firm's net income for the quarter came in at $65.6 million, or $.36 per share, compared to $96.0 million, or $.52 per share, a year ago. On an adjusted basis, EPS was $.92, beating the average Wall Street estimate of $.89.
The results include $48.6 million in damages from a jury verdict announced on Thursday against Life Tech related to a lawsuit filed by Enzo Biochem and Yale University in 2004 pertaining to the sale of CE sequencing products during 1998 to 2004. Life Tech said it plans to appeal the decision.
Life Tech recorded a GAAP-only expense of $48.5 million for the third quarter as a result of the Enzo verdict, resulting in a reduction in GAAP net income of $31.5 million, or $.18 per share, on a diluted basis.
On the call Lucier said that in the quarter Life Tech spent $208 million for share repurchases, bringing the total spent so far in 2012 for share repurchases to $535 million. About $612 million remains in the company's current $750 million share- repurchase program.
The firm adjusted its EPS estimates for full-year 2012 to a new range of $3.95 to $4.00, compared to its second-quarter range of $3.90 to $4.00.
For the fourth quarter, Hoffmeister gave EPS guidance of between $1.08 and $1.13.
Life Tech finished the quarter with $299.3 million in cash and short-term investments.
In Friday morning trade on the Nasdaq shares of Life Technologies were down around 1 percent at $49.88.