Celera Corporation (CRA) reported an EPS of 3 cents in the fourth quarter of fiscal 2010, compared to 4 cents in the year-ago quarter. However, excluding one-time items, the loss was of a penny, missing the year-ago quarter’s adjusted EPS of 2 cents. The Zacks Consensus Estimate was a loss of 5 cents for the quarter.
For the full year, Celera witnessed a huge increase in adjusted net loss per share to 28 cents from 6 cents in the previous year. However, the Zacks Consensus Estimate was a loss of 32 cents per share.
The company reported a significant 12.3% year-over-year decline in revenue to $34.9 million, almost in line with the Zacks Consensus Estimate. For the full year, net revenue was $128.2 million, a huge 22.3% decline from the previous year end mainly due to decline in the corporate business segment of Celera.
Celera operates through three segments: clinical lab testing services business conducted through Berkeley HeartLab (BHL), products and corporate, which recorded revenues of $22.2 million (up 4.7% year over year), $10.6 million (down 6.2%) and $2.1 million (down 68%), in the quarter respectively.
The lab services revenue improved as with the increase in demand of new higher value genetic tests by the physicians thereby increasing the average price per sample. However, this got partially offset with 9.8% decline in the sample volume due to competitive pressures and general economic conditions.
Products revenue declined due to lower sales of the products manufactured, which are distributed by Abbott Labs (ABT). This was partially offset by increased royalties from sales of RealTime assays used on the m2000 system. Lower licensing revenue including completion of payments from three licenses led to the decline in the corporate segment.
Gross margin declined 450 basis points to 67.9% in the reported quarter due to lower revenues. Selling, general and administrative (SG&A) expenses declined 11.1% while research and development (R&D) expenses declined only 3% year over year to $6.3 million.
Celera exited the fourth quarter with cash and short-term investments of $327 million compared with $316 million at September 25, 2010.The 3.5% increase was primarily due $6.2 million gain from the sale of investments and $4.7 million associated with a federal tax refund.
Celera has not provided any guidance for 2011.
The company also announced that, Quest Diagnostics (DGX), the world’s leading provider of commercial laboratory services, has decided to purchase all the outstanding shares of Celera for $8 per share, representing a transaction value of approximately $344 million.
We are currently Neutral on Celera stock for the long term.
ABBOTT LABS (ABT): Free Stock Analysis Report
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QUEST DIAGNOSTC (DGX): Free Stock Analysis Report
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