Celera Loss Widens, Revenues Dip – Analyst Blog

Celera Corporation’s (CRA) first quarter 2010 loss of 12 cents per share (excluding special items) was worse than the Zacks Consensus Estimate of a loss of 11 cents per share. The company earned 1 cent per share (excluding special items) in the year-ago quarter.         

 

On a reported basis, Celera suffered a loss of 15 cents per share in the first quarter of 2010 as opposed to a loss of 2 cents in the comparable quarter of 2009. The wider loss in the quarter reflects a drop in revenues across all divisions of the company.

 

Net revenues in the reported quarter declined 31.3% year over year to $31.4 million. By segments, revenues from Lab Services in the reported quarter fell approximately 38.6% year over year to $17.5 million, primarily because of lower reimbursement rates and lower sample volumes.

 

Revenues from Products slipped 4.8% year over year to $9.9 million. Corporate revenues came in at $4 million as against $6.8 million in the year-ago quarter, down 41.2%. The decline was attributable to lower revenues from licensees. The fall was partly mitigated by increased royalty revenues.

 

Research and development (R&D) spending in the reported quarter decreased to $6.6 million from $7.7 million in the year-ago quarter because of the completion of certain R&D projects and associated lower employee-related costs in the Corporate and Products segments.

 

Selling, general and administrative (SG&A) expenses in the quarter came in at $23.7 million compared with $25.3 million in the year-ago quarter, down 6.3%. The decrease was mainly attributable to a fall in allowance due to doubtful accounts and savings initiatives undertaken by the company. The decrease was offset partly by expenses related to infrastructure expansion coupled with increased litigation costs.

 

Celera exited the quarter with cash and short-term investments of approximately $319 million as against approximately $326 million at the end of fiscal 2009.

 

 

Celera provided guidance for 2010. The company projects a loss (excluding special items) in the range of 15 cents–21 cents per share in 2010. Revenues for 2010 are projected in the range of $145 million−$155 million. The current Zacks Consensus Estimate points to a loss of 20 cents per share for Celera in 2010.

 

Additionally, the company expects gross margin, as a percentage of revenue, to be in the range of 63%−67% for 2010. SG&A expenses are projected to be in the range of $90 million−$100 million and R&D expenses are projected in the range of $25 million−$30 million. The company expects to end 2010 with cash and short-term investments between $310 million and $320 million.