Market Commentary and Intraday News
Cepheid takes 3Q loss after patent suit settlement
243 days ago
(AP:SUNNYVALE, Calif.) Molecular diagnostics company Cepheid said Thursday it took a loss in the third quarter on costs related to a patent lawsuit.
In late September Cepheid agreed to settle a patent infringement lawsuit brought by blood analysis systems developer Abaxis. Cepheid took a charge of $15.1 million, or 23 cents per share, related to that settlement.
The company also lowered its annual income and revenue forecasts to reflect the legal charge and problems manufacturing some plastic parts used in the cartridges that go into its GeneXpert testing system. The GeneXpert testing system can diagnose illnesses including tuberculosis, influenza, drug-resistant MRSA infections, C. difficile, and enteroviral meningitis.
The company said it lost $21.3 million, or 32 cents per share, during the third quarter. A year ago it reported net income of $1.9 million, or 3 cents per share, in the same period. Excluding the settlement costs and other items, Cepheid said it earned a penny per share. Revenue rose 15 percent, to $80.5 million from $70.2 million.
Analysts expected the company to report income of a penny per share and $80.7 million in revenue, according to FactSet.
Cepheid said sales of reagents and disposable products were greater than expected because of increased test demand. Revenue from those products grew 23 percent to $64.6 million. During the third quarter Cepheid installed 115 GeneXpert systems through its commercial business, and 149 through a program that is intended to get tuberculosis tests to developing countries. However revenue from system sales slipped to $13.6 million from $14.7 million.
Since the end of the third quarter, Cepheid said it has shipped $6.7 million in orders that were delayed because of the manufacturing problems. The company said it has the problem under control, but it may take until the first weeks of November before the back orders are cleared and it can fill demand with immediate shipments.
Cepheid now expects to take a loss of 40 to 42 cents per share in 2012. Previously the company expected to break even or report net income of up to 4 cents per share. It is now forecasting $333 million in total revenue, down from its previous range of $333 million to $347 million.
Analysts are projecting net income of a penny per share and $332.9 million, on average.
Cepheid shares fell 2.8 percent to $33.04 Thursday and declined 29 cents to $32.75 in after-hours trading.
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