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Affymetrix Expects to Report 9 to 11 Percent Revenue Drop for Q2

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Affymetrix expects to report that its second-quarter revenues declined between 9 percent and 11 percent year over year, the company said after the close of the market on Wednesday.

The Santa Clara, Calif.-based microarray firm reported preliminary Q2 2011 revenues of between $64 million and $65 million, compared to $71.7 million for Q2 last year. Product revenues are expected to be between $58 million and $59 million, which would represent a retreat also of between 9 percent and 11 percent from a year-ago figure of $65.1 million.

Within product revenues, consumables revenues are anticipated to come in at $55 million, while instrument revenues are expected to total $3.5 million. The company said service revenues are expected to be about $5 million and license and royalty revenues to be about $1 million.

Noting a drop of about 10 percent in the company's consumables revenues year over year, Andrew Last, Affy's executive vice president and chief commercial officer, said in a statement that the company saw soft sales among its academic customers across all regions, particularly in North America, during the second quarter.

"We are clearly disappointed with our revenue this quarter," Affy CFO Tim Barabe added. "However, we still expect to generate approximately $10 million in positive cash flow for the second quarter and to have a net cash position of more than $155 million."

The company is scheduled to report its second quarter earnings on July 27.

At the recent Jefferies 2011 Global Healthcare Conference, Barabe told investors that the firm is moving away from an old business model focused on discovery exploration to a new one aimed at validation and clinical testing. The major market opportunities Affy has identified are those addressed by its Cytoscan cytogenetics product; the OncoScan FFPE product; the Quantigene View kits; and the Powered by Affymetrix program.

In addition, last week Frank Witney took over as president and CEO of Affy, replacing Kevin King.

In early Thursday trade on the Nasdaq, Affy's shares dropped 19 percent to $6.46.

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