* Q2 EPS $0.96 excluding items vs Street view $0.97
* Sees 2012 EPS $3.90-$4.00 vs prior view $3.90 to $4.05
* Revenue up 1 percent to $950 million
* Shares fall 0.7 percent
By Bill Berkrot
July 31 Life Technologies Corp on
Tuesday lowered the high end of its full year profit forecast
and said revenue would come in at the low end of its prior
outlook, citing unfavorable foreign exchange rates and weakness
The company also forecast lower-than-expected third quarter
profit and revenue, but said it sees fourth quarter revenue and
earnings to be higher than the third quarter.
"Based primarily on increased headwinds from currency and an
incrementally more conservative outlook for our European
operations, we are revising our 2012 guidance," Chief Executive
Gregory Lucier said in a statement.
The maker of genetic testing equipment and products used in
biotechnology research and development lowered the high end of
its previous forecast range by 5 cents and now expects earnings
of $3.90 to $4.00 per share, excluding special items. It now
expects organic revenue growth to come in at the low end of its
prior 2 percent to 4 percent forecast.
On a conference call with analysts, Lucier said the company
began to see a weakening in European markets at the end of the
second quarter. The stronger dollar versus the euro also
decreases profits of goods sold overseas.
"There is no cliff that we're looking at. We're just trying
to be prudent and conservative in our outlook," Lucier said.
For the third quarter, Life Tech said it expects to earn 87
cents to 90 cents per share on revenue of $900 million to $910
million. Wall Street was estimating earnings of 97 cents per
share and revenue of $940 million, according to Thomson Reuters
The company posted a second quarter net profit of $122.3
million, or 67 cents per share, compared with a profit of $95.5
million, or 52 cents per share, a year ago.
Excluding items, Life Tech said it earned 96 cents per
share, missing analysts' average expectations by a penny,
according to Thomson Reuters I/B/E/S.
Revenue for the quarter edged 1 percent higher to $950
million, surpassing Wall Street estimates of $943.6 million.
The company said it hopes to offset the earnings per share
impact of foreign exchange rates and acquisitions in the second
half of the year by reducing discretionary spending. It also
plans to repurchase of shares.
Life Tech announced plans to repurchase up to $750 million
worth of its shares in addition to some $62 million remaining on
a previous repurchase program.
"The core business continues to struggle. In addition
they've done a more significant move into diagnostics with some
recent deals and other internal investments and that's
constraining earnings growth," said ISI Group analyst Ross
"This business is struggling to grow top line and now almost
all of earnings (EPS) growth will probably come from share
repurchases," he said, adding that potential looming cuts in
U.S. government and academic research spending if Congress fails
to agree on a budget remains a concern.
The company's smallest division had the best performance in
the quarter as Applied Sciences sales rose 15 percent to $194
million, driven by strong demand for biotech production and
Research Consumables sales edged 1 percent higher to $403
million, but Genetic Analysis revenue fell 6 percent to $353
million, hurt by a $30 decline in solid instruments sales and
lower royalty payments. Increased sales of Ion Torrent gene
sequencing equipment helped offset some of the declines, the
Life Tech shares, which are up about 13 percent for the
year, slipped 0.7 percent to $43.58 in extended trading from
their Nasdaq close at $43.88.