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Affy's Q2 Revenues Fall 6 Percent but Beat Estimates; Shares Soar

NEW YORK (GenomeWeb News) – Affymetrix reported after the close of the market Wednesday that its second-quarter revenues declined 6 percent year-over-year while a loss in the year-ago period swung to a $7.3 million profit.

Affy posted total second-quarter revenue of $81.6 million, compared to $86.9 million in the comparable period of 2008. The company reported a negative currency impact of $3 million.

Its results handily beat analysts' consensus estimate of $77.1 million. In early Thursday trade on the Nasdaq, Affy's shares soared 24 percent to $7.28.

Product revenue for the quarter fell 10 percent to $67.2 million from $75 million in the second quarter of 2008. Arrays and reagents brought in $62.2 million and instruments $5 million in the current quarter.

Service revenue increased more than 8 percent to $12.2 million from $9 million in the prior-year period, while royalties and other revenue fell to $2.2 million from $2.9 million.

The company said it shipped 27 systems in the quarter, bringing its cumulative systems shipped to 1,866.

Affy reported net income of $7.3 million, or $.11 per diluted share, compared to a net loss of $3.6 million, or $.05 per share, in the year-ago period. The current quarter included a pretax restructuring charge of $200,000 and a $17.4 million gain on its repurchase of $69.1 million worth of convertible notes. The prior-year quarter included a pretax restructuring charge of $900,000.

Excluding the gain, Affy's EPS loss would have been $.07, which beat analysts' consensus estiate of $.19.

R&D spending rose to $20.4 million from $19.6 million while sales, general, and administrative costs increased to $31.7 million from $29.6 million in the second quarter of 2008.

As of June 30, Affy held $73.3 million in cash and cash equivalents.

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