tommysdad,
Thanks for your thoughts on WAT's stuff. It echoes those of the one other analytical chemist with whom I am acquainted. I always like to hear from end users, and if you or anyone can offer further field reports, well, I'm all ears and got plenty of beers.
WAT didn't give much color on the slow LC-MS sales, so it's good to have a couple of blanks filled in. Wonder if they read this stuff? I know some companies comb chat boards religiously.
Anyhow, ABI CC notes . . .
Kind of a pain that it's combined with the CRA call, makes the darn thing almost two hours long. Thank goodness they don't use a *^%#$@ 900 number like some companies I can name!
They added little in terms of general commentary to the PR, referenced here:
Message 16129999
But a few nuggets about specific products came out, noted below.
Many questions centered around the CRA diagnostics JV; analysts fishing for numbers to plug into their spreadsheets. The only thing of intertest not mentioned in the PR was that the equity accounting method would be used (which may not be that interesting; I believe Peter Suzman has posted, with relevant references, that pooling of interests is dead).
FX trimmed roughly 2% from revenue and 5% from EPS for the Q (8% for the year for EPS). They see this normalizing in calendar '02.
DSOs for Europe were 95, and 85 for the company overall. The latter is pretty good, IMO (well, maybe DSOs are shorter in proportion to the consumables business' relative size; but it's better than, say, WAT's DSOs). Inventories $380 million. Cash flow flat in the low 140 millions. GMs steady in the 52 - 53% range. SG&A to decline a bit as % of revenues.
No breakout of consumables, the bright spot. No significant revenues from proteomics reagents seen for a couple of years, as they are currently such a small part of the mix.
Sales to CRA and Celera Diagnostics at full price.
Prism 3700s the weak spot, duh. Order activity strong for the medium throughput (and much cheaper) Prism 3100. Demand exceeding supply for the 4000 MS. TOF/TOF to be hard launched in fiscal Q302 (that is, 2 1/2 calendar Qs from now). Some early access use (Trickle editor's note: that would be Oxford Glyco, for one). The other strong instrument is the 7900 HT, which has been shipping for two quarters. Currently used in conjunction with custom assays for gene expression and SNP analysis, growth expected to accelerate when a larger reagent product line becomes available for it. This to start happening in the first half of calendar '02. ABI is increasing oligo manufacturing capability ten fold in large part for this purpose. Much of this will initially be headed for CRA diagnostics.
In sum, the news here is how well the 4000 MS is selling. We already got hints last quarter that the Prism 3100 was doing well and the 3700 was not. Also news that the 7900 HT is doing well. I would say that this is what has popped the stock back up a bit.
Again, this adds weight to my contention that consumables have been doing well while every other segment in trickle has been hammered. This is why I like QGENF, a strong consumables play that is near lows. EBIO, an even purer consumables play, is another possibly undervalued shot, and it has ties to ABI.
It looks like there is light at the end of the tunnel for big ticket items, too. But unless you believe the overall market bottom is in, you could likely trade these for another quarter or two before buying and holding for intermediate to long term late this year, IMO.
Next up: BIOa
Cheers, Tuck |
