Life Technologies finished the
first half of the year in line with their expectations, and revenue for the
quarter even came in a little bit higher than they expected at $950 million.
Revenue growth came in at 5%, if the expected headwinds from a decline in their
SOLID platform are excluded. Net income rose from 52 cents per share to 67
cents per share year over year and EPS missed analysts’ estimates by $0.01 at
$0.96 cents per share. During the quarter, they repurchased $150 million worth
in shares. Emerging markets such as Asia continued to drive growth, while their
push into the medical diagnostics markets in Hospitals and clinics has also
helped.
Life Technologies recently opened a
plant in Singapore. This is a move that signifies their increased penetration
in Asian markets. Life recently announced plans to accelerate the development
of their Ion Torrent sequencer after meeting internal goals and is seeing a
strong demand for it. On July 16, they acquired Navigenics, a company that can
provide clinical diagnostic testing laboratories for life to test kits for its
upcoming sequencer, showing that it will keep trying to push the new machine
into the clinical and diagnostic market.
Looking forward, Life Technologies
trimmed their year EPS by $0.05 to $4.00 on the high end, while remaining
stable on the low end of $3.90. They also expect their total revenue growth to
be more towards the low end of 2 - 4%. Life technologies has revised their
projections because of a bleak macro situation in Europe and recent
acquisitions to drive their Medical Sciences segment. Additionally, while there
hasn’t been any NIH budget cuts recently, they continue to monitor the
sequestration and budget news coming from congress, as a cut could affect
spending in their academic market.
LIFE continues to be extremely
bullish on their upcoming Proton sequencer, exceeding company expectations in
both performance and demand from customers. They see emerging markets in Asia
and the medical and diagnostics market in the US as primary drivers of growth,
especially in the fourth quarter of 2012. They have taken into account macro
conditions in Europe and continue to monitor budgetary policies in the US. We
remain positive on the stock, but continue to monitor news from competitors’
pipelines, Europe, and budgetary policies in the US.
-Jorge Perez
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