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Affymetrix Q3 Revenues Increase 8 Percent; Beats Estimates on Top, Bottom Lines

NEW YORK (GenomeWeb) – Affymetrix's third quarter revenues increased 8 percent year over year, the company reported after the close of the market on Thursday.

For the three months ended Sept. 30, total revenues improved to $87.1 million from $80.4 million in Q3 2013, beating the consensus Wall Street estimate of $84.4 million.

Product sales were up to $78.1 million from $74.8 million a year ago, while services and other revenues increased to $9 million from $5.6 million.

Product revenues for Q3 2014 included consumable revenues of $73.7 million, compared to $72 million a year ago, and instrument revenues of $4.4 million, up from $2.8 million a year ago, the Santa Clara, Calif.-based firm said.

On a conference call following the release of its financial results, Affy President and CEO Frank Witney said that core genetic analysis revenues increased more than 40 percent year over year, driven by growth in genotyping and the company's clinical portfolio. Genotyping revenues were up 46 percent from a year ago due to a "significant ramp" in biobanking projects, such as the UK Biobank project, the US Department of Veteran's Affairs Million Veterans Program, and the China Kadoorie Biobank project.

Affy also saw "solid growth" in agbio applications, which constituted about 25 percent of the company's total genotyping revenues in the quarter, Witney said. Remaining within genetic analysis, cytogenetics revenues were up 17 percent as the transition to Affy's CytoScan Dx "is progressing well," he added.

In the eBioscience unit, the core flow cytometry and immunoassay business was up 6 percent year over year, while life science reagents revenues were about flat compared to the year-ago period, Witney said.

The gene expression business unit, meanwhile, was down by about 15 percent year over year, and in line with the trends seen by the company in the second quarter.

Affy posted a profit of $2.4 million, or $.03 per share, for the recently completed quarter, compared to a net loss of $4.2 million, or a $.06 per share, a year ago. On a non-GAAP basis, EPS for Q3 2014 was $.08, beating the average Wall Street estimate of $.04.

Its R&D spending was up 12 percent year over year to $12.9 million from $11.5 million, and its SG&A spending inched up less than 1 percent to $33.7 million from $33.6 million.

The company exited the third quarter with $68.3 million in cash and cash equivalents.

Highlights in the third quarter included a deal with Greenwood Genetic Center to offer Affy's CytoScan Dx Assay chromosomal microarray analysis test. More recently, it signed a deal to supply Ariosa Diagnostics with arrays and instruments for use in Ariosa's Harmony non-invasive prenatal test, and last week Affy exclusively licensed technology from Peptide Groove for HLA typing of human samples.

On the call, Witney said that 2014 marks the completion of the second phase of Affy's strategic plan. "Our top priorities during this phase have been to return the company to growth, to achieve sustained profitability, and to strengthen our balance sheet. In the third quarter, we continued to make significant progress toward all these goals," Witney said.

The firm raised its full-year 2014 revenue guidance to $345 million from previous guidance of $340 million given when its second quarter results were released.

In Friday morning trade on the Nasdaq, shares of Affy were up more than 5 percent at $8.75.