Affymetrix Inc. on Monday forecast a second-quarter loss of $4 million to $7 million, excluding acquisition-related charges, because sales of its gene chip tools used in genetic research are less than expected.
The Santa Clara-based company said it expects revenue of $44 million to $50 million, below previous estimates. Analysts had been projecting revenue of $55 million to $60 million, said Banc of America analyst James Reddoch.
Affymetrix is the world's largest supplier of gene chips, glass slides with DNA fragments attached that are used to analyze genetic material. The announcement follows similar ones by other companies that make drug research tools, such as Applied Biosystems Group and Molecular Devices Corp., as the economic slowdown causes biotechnology companies to reduce spending and cancel orders.
"We have found that consolidation trends and financial pressures have impacted decision-making," said Affymetrix President Susan Siegel during a conference call.
Affymetrix had been expected to lose 2 cents a share, the average estimate of analysts surveyed by First Call/Thomson Financial. A $4-million-to-$7-million loss translates into a loss of about 6 cents to 11 cents a share, Reddoch said.
Sales also have been hurt by Affymetrix's decision to replace defective chips containing data on mouse genes, the company said. A drop in the company's line of do-it-yourself "microarrays," which allow customers to prepare their own DNA tests, made up a third of the revenue shortfall.
The estimates were released after the close of U.S. markets. Affymetrix shares fell $3.76 to close at $40.95 on Nasdaq.