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Affymetrix's Q2 Revenues to Fall Short of Earlier Estimates

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Affymetrix today said that it expects to report second-quarter revenues that fall short of its previous guidance.

The Santa Clara, Calif.-based microarray firm said that it expects to report second-quarter revenues of $71 million to $72 million, well below its guidance of $80 million to $82 million provided when it released its first-quarter results in April. Analysts, on average, had expected Q2 revenues of $82.2 million, with a predicted net loss of $.03 per share.

Affy cited a few factors that it believes contributed to the shortfall, including a delayed and lengthening of capital equipment purchase cycles by academic research customers, particularly in Europe, as well as declines in RNA-related sales, which it said were caused by the integration of recent acquisitions and realignment of sales territories. Affy said the decline in RNA sales were offset by increased sales of DNA products. In addition, the firm said a "material deterioration" in the Euro and British pound of $1 million since it provided its guidance in April also contributed to the lower revenues.

"When the company previously issued guidance for the second quarter of 2010, we anticipated that growth in product sales would offset an expected decline in services revenue as compared to the second quarter of 2009," Affymetrix President and CEO Kevin King said in a statement. "However, instrument adoption was slower than anticipated, principally due to reduced foreign academic research spending."

For its first quarter of 2010, Affymetrix had reported that its instrumentation revenue was up 38 percent over the prior year, driven by adoption of its GeneTitan platform and initial shipments of its GeneAtlas system.

Affy will report its second-quarter results on July 21. It said that it will not provide updated revenue guidance for the remainder of the year due to the uncertainties surrounding academic research funding and foreign currency fluctuations.

In early Wednesday trade on the Nasdaq, Affy's shares tumbled 25 percent to $4.14.

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