Affymetrix estimates revenue below Street expectations, shares fall

Mon Oct 8, 2012 11:53am EDT

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(Reuters) - Affymetrix Inc (AFFX.O) estimated third-quarter revenue that was below Wall Street expectations, as tightening academic funding worldwide reduced sales at its gene expression and eBioscience business units, sending the company's shares down as much as 20 percent.

Gene-sequencing device makers have been facing a tough time as the U.S. government reduced funding for basic science research to academic and research institutions -- their main clients.

The genetic analysis products maker said total third-quarter revenue would be $80 million, lower than analysts' estimates of $84.6 million, according to Thomson Reuters I/B/E/S.

Affymetrix expects eBioscience, the privately held company it acquired in November to tap opportunities in immunology and oncology research and diagnostics, to contribute $18 million to third-quarter revenue.

Second-quarter revenue was $66.4 million, including $1.4 million from eBioscience.

Total full-year revenue, excluding eBioscience, will be flat to slightly down, Chief Executive Frank Witney said.

"Affymetrix has a history in recent years of liberally pointing to industry-wide 'catch all' dynamics rather than owning up to its own competitive/operational deficiencies in instances where it comes up short of expectations, which have not been infrequent," analyst Doug Schenkel of Cowen and Co said.

If the company's cytogenetics revenue growth was about $7 million, then revenue excluding eBioscience proceeds declined about 12.5 percent over previous year and 5 percent over the last quarter, Schenkel added.

Shares of Santa Clara, California-based Affymetrix fell to a three-year low of $3.45 on Monday morning. They were trading down about 16 percent around midday on the Nasdaq.

(Reporting By Pallavi Ail in Bangalore; Editing by Roshni Menon)

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