Why Affymetrix, Inc. Shares Dropped

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Affymetrix (NASDAQ: AFFX  ) , a life science tools and molecular diagnostic manufacturer, dipped as much as 17% after the company reported its fourth quarter earnings results after the bell last night.

So what: For the quarter, Affymetrix delivered a 10% increase in year over year revenue to $92.6 million as adjusted profits improved to $0.02 per share on a 5% increase in gross margin to 59%, reversing a $0.02 per share year-ago net loss. By comparison, though, Wall Street had been expecting only $91 million in revenue, but was looking for a more robust $0.07 in fourth-quarter EPS.

Now what: This has pretty much been the story with Affymetrix for as long as my mind can recall. Namely, plenty of promise on paper, but an inability to deliver bottom-line growth on any consistent basis. Thus far, it appears Affymetrix's purchase of eBioscience is aiding revenue growth nicely, but not providing the profitable impact that many shareholders had hoped for. Once again, on paper Affymetrix makes a world of sense given that baby boomers are aging and the push toward using genetic tests to personalize medical treatments is only likely to gain steam in the coming years. However, a tough spending environment perpetuated by funding cuts from the U.S. government and Affymetrix's inability to really trim its costs any further make it a somewhat expensive gamble here even following today's drop.

Perhaps you should be considering this top stock for 2014 instead
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2827098, ~/Articles/ArticleHandler.aspx, 9/2/2015 12:49:04 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated 3 hours ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:00 PM
AFFX $8.97 Down -0.36 -3.86%
Affymetrix CAPS Rating: **