Affymetrix stock skids on 2Q revenue outlook
Affymetrix slides after company says 2nd-quarter revenue will decline as academic demand falls
On Thursday July 7, 2011, 11:24 am
NEW YORK (AP) -- Shares of Affymetrix Inc. tumbled Thursday after the genetic testing instrument maker forecast disappointing second-quarter revenue.
THE SPARK: After the market closed on Wednesday, Affymetrix said its revenue will fall at least 9 percent in the second quarter. Its estimate of $64 million to $65 million was about $10 million less than analysts expected. Wall Street had expected the company's sales to improve from last year's $71.7 million.
THE BIG PICTURE: The Santa Clara, Calif., company said sales to academic customers decreased, especially in North America. Lower product revenue was responsible for most of the decline, as Affymetrix said those sales fell to about $58.5 million from $65.1 million a year ago
THE ANALYSIS: Robert W. Baird & Co. analyst Quintin Lai said a bad quarter is not a surprise given the company's recent CEO change. He said he thinks new President and CEO Frank Witney will focus on improving the company's revenue growth.
Witney's predecessor, Kevin King, left the company June 30. Affymetrix announced the change June 1, saying King was resigning to pursue other interests.
Lai reiterated an "Outperform" rating on the shares, but trimmed his price target to $10 per share from $11.
SHARE ACTION: Affymetrix stock dropped $1.47, or 18.4 percent, to $6.53.
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