Shares of Affymetrix Inc. slid sharply in Friday trading, dropping 35 percent soon after the opening bell and never gaining much ground back after the company warned late Thursday that its first-quarter revenue would total about $11 million less than originally projected.
The Santa Clara, Calif.-based firm's stock (NASDAQ:AFFX) dropped $9.67 to close at $18.33 in trading of 19.4 million shares. After the market closed Thursday, Affymetrix said it expects first-quarter product and related revenue to range between $60 million and $62 million, down from previous guidance of $71 million to $73 million.
Affymetrix blamed its slowed rate of growth on global economic weakness and cautious capital spending. More specifically, the company said that while academic array revenue growth remained strong, capital spending in the academic and biotech sectors has slowed.
A genomics tools company, Affymetrix has developed a DNA microarray system called GeneChip that is designed to analyze large amounts of genetic information in a small platform.
The company plans to release its final first-quarter operating results after market close April 23, at which time Affymetrix officials have scheduled a conference call to provide further financial guidance.
The downgraded earnings expectations are a sharp contrast to the numbers the company posted for the period ended Dec. 31. Affymetrix reported record revenue and profits for its fourth quarter and 2002 fiscal year, including quarterly net income of about $2.9 million compared to an $8.4 million net loss for the corresponding 2001 period. For the year, the company recorded a $1.6 million net loss as opposed to a $33.1 million net loss a year before.
Bolstering such figures were product revenue gains, which grew more than 26 percent to $69.7 million in 2002's fourth quarter compared to $55.2 in the comparable year-earlier period. Total year-end product revenue grew more than 27 percent to $248.5 million compared to $194.9 million in 2001.
Affymetrix attributed such increases in large part to strong demand for its GeneChip probe array business.
The company, which at the time projected product revenue growth of about 28 percent this year, ended 2002 with about $68 million in cash and cash equivalents.