Array BioPharma Inc’s (ARRY) second quarter fiscal 2010 net loss came in at $21.8 million, or 44 cents per share, which was lower than the Zacks Consensus Estimate of a net loss of 55 cents. The company suffered a loss of $37.8 million, or 79 cents a share, in the year-ago quarter. The narrower loss in the quarter was attributable to increased revenues coupled with lower operating expenses.
Quarterly Results
Total revenue for the quarter came in at $9.6 million, representing approximately a 25% increase from the year-ago quarter. Array’s license and milestone revenue for the quarter increased to $5.2 million from $2.6 million while collaboration revenue fell to $4.4 million in the quarter, down 12%.
Total operating expenses in the quarter declined to $28.8 million from $33.2 million. The company spent $19.1 million towards research and development during the quarter for the clinical advancement of its wholly owned drugs versus $23.7 million in the year-ago quarter.
The company exited the quarter with cash, cash equivalents and marketable securities of $115.36 million as against $57.49 million at the end of fiscal 2009. Furthermore, Array ended the quarter with $94.7 million in net long-term debt as against $68.2 million at the end of fiscal 2009.
The lower loss for the quarter had a positive impact on Array’s stock price. The announcement, made after market close on Feb 1, 2010, caused the shares to rise by over 7% in after market trading. In afternoon trading Tuesday, the stock has added another 1.25%.
Estimate Revisions Trends
None of the 10 analysts covering the stock have revised their earnings estimates over the past 7 days. In fact, there were no estimate revisions in either direction over the last 30 days. The lack of estimate revisions (both for the next quarter as well as for fiscal 2010) implies that there is no pressure on the performance of the stock in the upcoming quarters. As a result, our short-term as well as long-term recommendations on the stock are Hold (Zacks Rank #3) and Neutral, respectively.
With respect to earnings surprises, the stock has posted positive surprises (lower losses than the Zacks Consensus Estimate) in three of the last four quarters. The company delivered in-line results in the fourth quarter of fiscal 2009. The average remained at 10.21%.
The current Zacks Consensus Estimates for the third quarter and full-year 2010 point at net loss of 47 cents and $1.99 for the company, respectively. The upside potential of these estimates, essentially a proxy for future earnings surprises, currently stands at -19.15% and 0% for the next quarter and full-year 2010, respectively.
Read the full analyst report on “ARRY”
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