Affymetrix Earnings Preview

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Affymetrix (NAS: AFFX) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, Nov. 2. Affymetrix develops, manufactures, and sells products and services for genetic analysis to the life science research and clinical health-care markets.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Affymetrix with nine of 13 analysts rating it hold. Analysts don't like Affymetrix as much as competitor Sequenom overall. Six out of 11 analysts rate Sequenom a buy compared to two of 13 for Affymetrix. Analysts haven't adjusted their rating of Affymetrix for the past three months.
  • Revenue forecasts: On average, analysts predict $67.1 million in revenue this quarter. That would represent a decline of 9.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.04 per share. Estimates range from a loss of $0.08 to a profit of $0.02.

What our community says:
CAPS All Stars are solidly backing the stock with 87.8% assigning it an "outperform" rating. The community at large backs the All Stars with 84% awarding it a rating of "outperform." Fools have embraced Affymetrix and haven't been shy with their opinions lately, logging 210 posts in the past 30 days. Affymetrix's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

60.1%

63.2%

58.1%

54.7%

Operating Margin

(4.8%)

4.3%

6.1%

(2.7%)

Net Margin

(5.7%)

0.1%

4.7%

1.3%

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