Shares of Santa Clara, Calif.-based biomedical company
) spiked 11.5% following the release of its 2013-fourth quarter
revenue guidance that exceeded estimates. Shares of the company
closed at $8.81, represented a whopping one-year return of nearly
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AFFX revealed that it anticipates fourth quarter revenues of
$91.0 million, including a one-time licensing payment of $5.3
million from a diagnostic partner. For fiscal 2013, the company
expects total revenue of roughly $329.0 million.
Both the quarterly and annual estimates surpassed the Zacks
Consensus Estimate of $85 million and $322 million, respectively.
The quarterly sales also reflect a 7.8% rise from the year-ago
level of $84.4 million.
Affymetrix posted adjusted earnings per share of 5 cents in the
third quarter of 2013, surpassing the Zacks Consensus Estimate of
2 cents and rebounding from the year-ago adjusted loss of 3
Revenues inched up 0.9% to $80.4 million, beating the Zacks
Consensus Estimate of $79 million. Product revenues improved 2.9%
to $74.8 million, while Service and other revenues dropped 18.8%
to $5.6 million in the reported quarter.
Gross margin surged 300 basis points (bps) to 55% from 52% in the
third quarter of 2012. However, on an adjusted basis, gross
margin increased 100 bps to 61%.
We believe that AFFX is ready for a turn around and the worst
days are over for the company. In the face of declining demand
for Affymetrix' flagship GeneChip Expression products, management
strategy to transform AFFX into a company with a broad reach in
the high-growth markets for translational medicine, molecular
diagnostics and applied markets is indeed encouraging.
Currently, AFFX retains a Zacks Rank #1 (Strong Buy). Other
players in the biomed/gene industry, which also look attractive
at present, include
Alimera Sciences, Inc.
Genomic Health Inc.
Horizon Pharma, Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).