), a leading diagnostic devices company, reported its first quarter
fiscal 2012 adjusted (excluding one-time expenses) earnings of 55
cents a share, beating both the Zacks Consensus Estimate and the
year-ego earnings of 51 cents and 54 cents, respectively. In the
reported quarter, profit slipped 3.5% to $22.5 million (or 49 cents
Gen-Probe recently announced that women's healthcare major,
) will takeover the company for $3,700 million (or $82.75 a
Revenues rose 7% year over year to $153.4 million beating the
Zacks Consensus Estimate of $151 million. Product sales increased
9% to $150.1 million as healthy sales across Blood Screening and
Clinical Diagnostics franchises was partially offset by lower
revenues from the Research Products and Services and Collaborative
Revenues from Clinical Diagnostics segment grew 7% (up 8% in
constant currency) year over year to $94.9 million, led by strong
sales of APTIMA Combo 2, APTIMA HPV and APTIMA Trichomonas assays.
Foreign exchange swings negated revenues by approximately $0.5
Blood Screening sales rose 12% (up 13% in constant currency) to
$52.5 million, driven by higher shipping of TIGRIS devices to its
). Foreign exchange swings reduced sales by roughly $0.1
Research Products and Services sales dropped 13% to $2.7 million
in the quarter. Revenues from Collaborative Research plunged 61% to
$1.4 million, hurt by lower funding from Novartis for the
development of the PANTHER system for blood screening.
Gen-Probe expects to launch the PANTHER system in international
blood screening markets in 2012. Royalty and license revenues
increased 36% to $1.9 million.
Product sales gross margin was 65.1% versus 69.6% in the
year-ago quarter, resulting from unfavorable product mix. Operating
margin decreased to 20.6% from 24.2% due to higher sales and
marketing expenses along with poor product mix.
Marketing and sales expenses climbed 15% to $19 million due to
expansion in the operations of women's healthcare. General and
administrative expenses rose 4% to $19 million as a result of
continuing litigation.Research and development expenses dipped 1%
year over year to $28.6 million.
Gen-Probe exited first quarter 2012 with cash and cash
equivalents and marketable securities of $401.3 million (down
18.3%) and short-term debt of $248 million, flat year over year.
The company produced $31.7 million in cash flows from operations
during the quarter and invested $9.3 million in capital
expenditure, resulting in a free cash flow of $22.4 million.
Gen-Probe expects somewhat higher sequential revenue for the
second quarter 2012 and adjusted earnings in the band of 55 cents
and 58 cents a share. On a reported basis, the company forecasts
earnings to remain in the range of 51 cents to 54 cents per share.
Fiscal earnings and revenues forecast remain unchanged.
Currently, we have a long-term Neutral recommendation on
Gen-Probe, which is in tandem with a short-term Zacks #3 Rank
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