Luminex Corporation (LMNX) reported a third-quarter loss of $0.6 million or a penny per share as opposed to a net income of $3.2 million or 8 cents per share in the comparable period of 2008. The Zacks Consensus Estimate for the reported quarter was for a gain of 7 cents.
The loss in the quarter was attributable to higher operating expenses. We remain concerned about the company’s dependence on partners for generating revenues, as the strategy has inherent risks. Furthermore, the competitive life sciences industry is characterized by rapid and continuous technological innovation which further challenges Luminex.
The company’s strategy to grow by acquisitions is also risky. In view of these concerns, we downgrade the stock to Underperform.Zacks Investment Research
