This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at firstname.lastname@example.org or call 800-767-3771 ext. 9339.
Genetic products company, Affymetrix Inc. (AFFX - Analyst Report) provided its guidance for the 2012 fourth quarter results, based on available preliminary financial data. The company will report its financial results on January 31, after market closes.
Affymetrix expects revenues to be $84 million in the quarter, which is in line with the Zacks Consensus Estimate. Revenues from the acquired eBioscience business grew 5% year over year, contributing $18 million to total revenues.
Organically, the company is expected to grow 1% year over year. For 2012, total sales are estimated to be $295 million, an increase of 10.3% from the prior year. The Zacks Consensus Estimates for the fourth quarter and full year 2012 are expected to be a loss of 2 cents and 14 cents per share, respectively.
Affymetrix also announced a restructuring initiative to boost its bottom-line growth. The company will disembark 100 of its employees, representing 8% of its workforce. The company will incur most of the additional cost associated with the restructuring in the first quarter of 2013, which is expected to be roughly $7 million. Post restructuring, Affymetrix will be able to save roughly $25 million annually based on its 2013 outlook, of which $5 million is in cost of goods sold.
The company prepaid $9.6 million (the entire principal amount due in 2013) of its senior-secured debt in December last year, partly funded by the sale of its Sacramento manufacturing facility. At the end of 2012, senior debt was $73 million and cash-on-hand stood at roughly $35 million. Management believes that the restructuring effort will improve the company’s free cash flow position in 2013 and quicken repayment of its senior debt.
Affymetrix also revealed some changes in its top management in 2013. John F. (Rick) Runkel, executive vice president (EVP) and general counsel, will retire on March 31, 2013, and will be replaced by Ms. Siang Chin, who joined the company as vice president, chief corporate counsel in 2007. Additionally, Mr. Tim Barabe, EVP and CFO will also retire from the company.
Affymetrix is a leading provider of microarray-based products and services to the global research community. Along with Illumina Inc. (ILMN - Analyst Report), it is one of the two major providers of microarray technologies, primarily serving the field of genetic research. The company holds a leading position in the gene expression products and services market.
Affymetrix is expanding its customer base through new product launches and strategic alliances. Moreover, the company is pursuing a number of strategies (including acquisitions and expansion into new markets) aimed at expanding its top line.
However, research and development spending by Affymetrix’s customers have fallen considerably due to a weak macroeconomic environment coupled with stringent government actions including budget cuts. We currently have a Zacks Rank #2 (Buy) on the stock.