Affymetrix Stumbles Again

This hasn't been a great year for Affymetrix (Nasdaq: AFFX  ) shareholders. Though the company was one of the only genomics plays to escape the bubble with a real business and a solid market cap, Affymetrix's stock seemed poised to take a serious hit Wednesday for the second time in about three months.

Once again, earnings performance was the culprit. In this case, the company announced on Tuesday that revenue would come in about $10 million to $12 million below forecast, missing the mean estimate by about 12%. Management said it had exceptionally low manufacturing yields for the new 500K Mapping Array Set and simply couldn't make and ship enough of them in the quarter.

Not being able to make enough products is admittedly not the worst way to miss a quarter. That said, I'm not exactly comforted by the CFO's statement that these problems aren't unusual with such a sophisticated product. Affymetrix is in the business of making these high-tech machines. Keeping its manufacturing capabilities up to date is just as important as staying at the leading edge of genomics technology. In any case, the company indicated that yields were improving as the quarter ended.

Here's hoping that Affymetrix can get its ducks in a row and build a business as good as its technology. If they don't, there are always companies like Applied Biosystems (NYSE: ABI  ) , Beckman Coulter (NYSE: BEC  ) , and General Electric (NYSE: GE  ) waiting in the wings. It's certainly not too late for Affymetrix to live up to its promise as a "picks and shovels" supplier to the world of genomics-based drug development. But the 5% year-over-year revenue growth we'll see in this quarter isn't going to keep the growth crowd happy for long.

For more on drug development:

• A Ray of Hope for Flamel?
• The Little Lab That Could
• A Blueprint to Biotech Profits
• Big Miss Afflicts Affymetrix

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).