(Adds details, share movement, analysts’ comments)
By Anuradha Ramanathan
BANGALORE, July 17 (Reuters) - Medical diagnostic kit maker Meridian Bioscience Inc’s (VIVO.O) quarterly profit was in-line with analysts’ estimates, but revenue missed slightly as it was hurt by a drop in sales at the life science unit, sending the company’s shares down by as much as 13 percent.
“The market reaction to this quarter is bit of an overreaction,” Robert W. Baird analyst Quintin Lai said. He added that the “sell-off was unwarranted.”
Lai kept his “outperform” rating on the stock, saying the overall outlook for the company remained strong as it had reaffirmed its view for the current financial year ending Sept. 30 and given positive initial forecast for fiscal 2009.
For 2008, Meridian expects to earn 72 cents to 75 cents a share, on revenue of $140 million and $142 million. It sees continued double-digit profit and sales growth in 2009.
Analysts on average expect earnings of 74 cents a share, before items, on revenue of $141.2 million for 2008, according to Reuters Estimates.
Soleil analyst Elliott Schlang attributed the drop in shares to weak quarterly revenue and said “life science was where the shortfall appeared.”
Schlang added that the life science sector, which posted a drop in sales for the second consecutive quarter, was “generally rather lumpy.” He has a “hold” rating on the stock.
Net sales of the life science segment fell 12 percent to $5.6 million from $6.4 million a year earlier for the third quarter ended June 30. Last quarter, sales from the segment fell 9 percent.
For the third quarter, the Cincinnati-based company’s net income was $7.8 million, or 19 cents a share, compared with $8.8 million, or 22 cents a share, a year ago.
Revenue rose 11 percent to $33.1 million.
Analysts, on an average, expected a profit of 19 cents a share, before special items, on revenue of $34.4 million.
The year-ago third quarter included a tax benefit of 6 cents a share, the company said in a statement.
Meridian shares fell 11 percent to $25.53 in afternoon trade. They touched a low of $25 earlier in the session. (Editing by Himani Sarkar;)