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Genotyping Array Sales Push Affymetrix's Q2 Revenues up 7 Percent

NEW YORK (GenomeWeb News) – Affymetrix said after the close of the market on Thursday that its second quarter revenues climbed 7 percent year over year.

The Santa Clara, Calif.-based microarray firm said that for the three months ended June 30, total revenues increased to $85.4 million from $79.5 million a year ago, beating the average Wall Street estimate of $83.3 million.

Product sales ticked up 2 percent to $75.9 million from $74.2 million a year ago, while services and other revenues jumped 79 percent year over year to $9.5 million from $5.3 million. Consumable revenue rose 4 percent to $72.6 million from $70 million in the quarter, while instrument revenue dropped 21 percent to $3.3 million from $4.2 million.

President and CEO Frank Witney said in a statement that Affy saw "consistent performance across the business and strong growth in our Genetic Analysis business unit" in the second quarter. As a result of the firm's first-half performance, he said Affy has raised its full-year guidance for total revenue of $340 million, roughly 3 percent more than its full-year 2013 revenues of $330 million.

The majority of the firm's genetic analysis revenues are generated by sales of its cytogenetics products, such as its CytoScan platform, as well as its Axiom genotyping products.

On a conference call following the release of the results, Witney said that genetic analysis revenues increased 45 percent year over year, including a 14 percent spike in CytoScan revenues.

"This product line continues to benefit from expanding our customer base in all geographies, increasing our market share in key accounts and expanding our customer base for research-use-only applications in reproductive health and oncology," Witney said.

Sales to agricultural biotechnology customers and biobanks also helped to drive the increase in genetic analysis revenues, Witney said.

Affy's revenues generated by its eBioscience unit increased 5 percent year over year, while life science reagents revenues were roughly flat compared to the prior-year period.

The firm's expression unit revenues dropped 16 percent in Q2. Witney said that sales of expression chips generated about a fifth of the company's overall income in Q2, compared to more than a quarter of total revenues in the second quarter of 2013, and that the increased use of its expression arrays in clinical applications should help to sustain the firm's overall growth in the future.

For the quarter, Affy posted a net loss of $0.9 million, or $.01 per share, compared to a loss of $6.1 million, or $.09 per share, in the year-ago period. On an adjusted basis, it had earnings per share of $.07, beating the consensus Wall Street estimate of $.03 per share.

Affy's R&D costs rose 8 percent year over year to $12.9 million from $12.0 million, while SG&A costs climbed 8 percent to $36.3 million from $33.5 million.

CFO Gavin Wood attributed the increase in R&D spend to development of newer, more automated instrumentation. The jump in SG&A expenses was primarily due to higher litigation costs, he added.

The company finished the quarter with $51.5 million in cash and cash equivalents.

In early Friday trade on the Nasdaq, shares of Affymetrix were up nearly 1 percent at $8.66.

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