Long-term worries as Applied Bio posts flat Q3

By Wai Lang Chu

- Last updated on GMT

Related tags: Cent, Revenue, Income

Applied Biosystems (ABI) reported slight revenue rises in its third
quarter performance, but long term, the lab firm acknowledged its
instrument arm had been negatively affected by a weakened
pharmaceutical environment.

The lab instrumentation firm also acknowledged it will need to be even more proactive in developing its mass spec-based technology to boost that part of its business. ABI aren't the only firm to suffer the effects of a downturn in Pharma spending. Results also released by Agilent and GE Healthcare suggest the Pharma landscape is in for a rough 12 months as Pharma look to curb spending in the face of an uncertain economic outlook. ABI posted revenues of $552.6m for the three-month period ended March 31, an increase from revenues of $529.9m in the third quarter of 2007. Net income was $82.9m - an increase of 9.8 per cent from 2007 first-quarter net income figure of $75.5m. The firm saw a 4 per cent increase over 2007 in DNA sequencing revenues posting $146.4m. Real-Time PCR/Applied Genomics revenues rose 10 per cent to $200.9m. Spectrometry revenues crept up 1 per cent to $128.5m while Core PCR and DNA Synthesis revenues went up 6 per cent to $49.5m. "During the first quarter we saw continued strength in our Real-Time PCR/Applied Genomics business, our largest; gains in DNA sequencing; and challenges in mass spectrometry​," said ABI President and COO Mark Stevenson in a statement. ABI's future performance will be monitored closely by city analysts, who agree the announcement made earlier this year of Applera's intention to split its two businesses - Celera and Applied Biosystems into two independently traded companies, might harm Celera's business. While the separation makes good business sense in terms of allowing each company to form specialised niches that play to their productive strengths, Celera has admitted that it would no longer have early access to ABI's instrumentation, reagents, and other technologies for use in its diagnostic products and services. ABI's instrument revenue decreased by 1 per cent to $214.4m, while consumables revenue went up by 7 per cent to $237.3m. Other revenue sources including service, support, royalties, licenses, and consulting rose 8 per cent to $100.9m. ABI's sales in the US were of little concern decreasing just 4 per cent from 2007 to $217.2m. Sales in Europe went up 7 per cent including a 6 per cent currency benefit to a tune of $196m. Sales in Japan upped to 7 per cent with a 10 per cent currency benefit to $62.2m. Sales to other Asia Pacific countries increased 24 per cent including a 4 per cent currency benefit to $49.3m. ABI's R&D outgoings decreased 10.7 per cent to $48.6m compared to $54.4m of 2007. ABI attributed the decrease to lower employee-related costs associated with the termination of a contract with the US Department of Defence. ABI finished the quarter with $364.7 million in cash and short-term investments.

Related topics: Contract Manufacturing & Logistics

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