Cepheid tumbles after cutting 2012 forecastThe Associated Press
NEW YORK -- Shares of Cepheid lost nearly a fifth of their value Friday after the medical test maker again cut its earnings forecast for the year, saying that costs associated with its program to sell tuberculosis tests to developing countries is hurting profitability.
Late Thursday, Cepheid lowered its full-year outlook for the second time, saying that on a per-share basis it may only break even. Cepheid also pointed to cautious capital spending by hospitals and medical professionals ahead of the U.S. elections and less favorable foreign exchange rates.
Cepheid shares dropped as much as 24.3 percent during trading, and closed down $7.72 at $36.01.
The Sunnyvale, Calif., company sells the GeneXpert testing system, which can also diagnose illnesses including influenza, drug-resistant MRSA infections, C. difficile, and enteroviral meningitis. It also makes money by selling reagents, or substances that contribute to chemical reactions.
It sold 133 GeneXpert systems commercially in the second quarter and placed another 138 in developing countries. But CEO John Bishop did say that "certain features of the high burden developing country program could slow our progress on overall profitability goals in the immediate-term."
For the full year, Cepheid said it could break even on a per-share basis, or report net income of as much as 4 cents per share. That's far below the 17 cents to 24 cents per share that the company forecast in January and below the revised estimate it gave in April. The company still projects sales of $333 million to $347 million for the year.
On average, analysts had forecast earnings of 14 cents per share, including one-time items, and $342.3 million in revenue, according to FactSet.
In the second quarter Cepheid said its net income slipped to $1.1 million, or 2 cents per share, from $1.8 million, or 3 cents per share, a year ago. Revenue grew 21 percent, to $81 million from $67 million with product sales abroad surging 52 percent.
Analysts had expected a bottom-line profit of a penny per share and slightly higher revenue of $82.6 million.