Shares of Genoptix Inc. sank Friday after the diagnostic services company surprised Wall Street by posting lower first-quarter profit on a jump in spending.
Late Thursday, Genoptix reported its net income decreased 10 percent to $5.3 million, or 29 cents per share, from $5.9 million, or 33 cents per share. Revenue grew 21 percent to $47.4 million from $39.2 million. Both results were well short of Wall Street estimates, as analysts expected a profit of 42 cents per share and $53.2 million in revenue, according to Thomson Reuters.
Genoptix stock skidded $8.26, or 23 percent, to $28 in morning trading.
The Carlsbad, Calif., company said its spending surged, primarily due to greater sales and marketing costs. Genoptix said it managed about 15,000 patient cases in the first quarter.
In a note to clients, Oppenheimer analyst Charles Rhyee said the promotion of sales representatives hurt revenue by $2 million to $3 million. Severe winter weather also hurt Genoptix's revenue. Rhyee said he believes there were positive signs in the quarter, but the shortfall means it's unlikely Genoptix can exceed its profit and revenue guidance for the year.
Genoptix also said it still expects to earn $1.80 to $1.85 per share in 2010, on $235 million to $240 million in revenue. Analysts expect $1.91 per share and $237.1 million in revenue, on average.