NEW YORK (360Dx) – Diagnostics firm Abaxis reported flat fiscal third quarter revenues after the close of the market on Thursday.
For the three-month period ended Dec. 31, 2016 revenues were $52.8 million, compared to $52.9 million a year ago, and below the average analysts' estimate of $54.4 million.
The unanticipated results were due in part to foreign currency exchange rates, reductions in medical and veterinary orders from distributors such as Abbott Point of Care, and a difficult comparison for the medical business due to a large order in the prior-year quarter from China, the firm said.
Revenues in the medical market were down 26 percent year over year to $8.7 million from $11.8 million, while veterinary market revenues were up 6 percent to $43.2 million from $40.9 million.
"On the medical side, while our sales look a little skinny, our distributors shipped more instruments and more consumables than we shipped to them," Abaxis Chairman and CEO Clint Severson explained on a call to discuss the earnings. The firm placed 10 of its Piccolo instruments, a point-of-care chemistry analyzer, with the Japanese government in the quarter, Severson said, and the company now has 46 Piccolos placed there. It has also started development of a new system for the veterinary market that will read both blood chemistries and high-sensitivity immunoassays at the same time.
Futhermore, Don Wood, president and COO at the firm, noted that while the results in medical business appear disappointing, it was largely a result of the timing of orders placed by distributor Abbott. "The underlying trends of our domestic medical business with Abbott's customers are healthy and much stronger than our reported results indicate," Wood said, noting that the firm expects its orders to even out in the short run and that Abbott's placement of Abaxis' instruments in Q3 was the second-highest ever.
R&D spending increased 7 percent year over year in the quarter to $4.8 million from $4.4 million, while SG&A was $13.8 million in the quarter versus $13.9 million last year. Abaxis' Q3 net income was $6.8 million, or $.30 per share, down from $8.0 million, or $.35 per share in fiscal Q3 of 2015.
Wall street had estimated EPS of $.31.
At the end of the third quarter, Abaxis had cash and cash equivalents totaling $85.7 million.