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Affymetrix's Q3 Revenues Increase 4 Percent; Shares Sink on Estimates Miss

NEW YORK (GenomeWeb News) – Affymetrix reported after the close of the market Wednesday that its third-quarter revenues increased 4 percent while its net loss fell sharply.

However, its top- and bottom-line results missed analysts' consensus estimates. In early Thursday trade on the Nasdaq, Affy's shares traded down 18 percent at $7.25.

The Santa Clara, Calif.-based firm reported total revenues of $78.2 million for the three-month period ended Sept. 30, up from $75.2 million for the third quarter of 2008. Analysts, on average, had expected revenues of $80.7 million.

Affy's product sales grew to $66.2 million from $66 million year over year, while service revenues rose sharply to $9.9 million from $6.1 million. Its royalties and other revenues dropped to $2.1 million from $3.1 million.

The vast majority of its product revenue came from consumables sales, which were $62 million for the quarter. The firm shipped 21 instrument systems during Q3, bringing its cumulative systems shipped to around 1,890.

Kevin King, Affymetrix's CEO, said during a conference call that the firm is targeting sales of 35 GeneTitan systems for 2009.

Affy's net loss dropped to $8.8 million, or $.13 per share, compared to a net loss of $31.8 million, or $.46 per share, for the third quarter of 2008. Last year's results included charges of $5.1 million for acquired in-process technology and $14.6 million in restructuring charges.

On an adjusted basis, its EPS for the quarter was $.10, missing the consensus estimate of $.09.

Affy's R&D spending dropped to $18.8 million from $20.8 million, while its SG&A expenses increased to $30.6 million from $28.4 million.

The firm finished the quarter with $62.5 million.

Affy officials said during the call that the firm expects fourth-quarter revenues of between $82 million and $85 million.

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