Shares of molecular diagnostics company Cepheid were flat Thursday despite stronger-than-expected quarterly results.
THE SPARK: The Sunnyvale, Calif., company reported a profit of $527,000, or a penny per share, in the first quarter of 2011. A year ago Cepheid took a loss of $4.3 million, or 7 cents per share. Revenue rose 25 percent to $60.2 million from $48 million.
Analysts expected a loss of a penny per share and $57.4 million in revenue, according to FactSet. The company posted its results after the market closed on Wednesday.
Cepheid said it installed 120 GeneXpert diagnostic systems during the quarter. It said revenue from system sales rose to $12.7 million from $10.9 million, and reagent and disposable revenue grew 24 percent to $44.9 million. Cepheid's other revenue rose to $2.6 million from $863,000.
THE BIG PICTURE: Cepheid said its annual per-share results will range between a loss of a penny and a profit of 4 cents. The company said that if stock-based compensation costs and amortization costs are excluded, it expects a profit of 31 cents to 36 cents per share. Analysts expect a profit of 7 cents per share, on average. The Street estimate typically excludes one-time items.
Cepheid forecast revenue of $245 million to $255 million in revenue, while analysts are looking for $253.8 million.
"Good quarter but not enough in our view," said Wedbush analyst Zarak Khurshid, who reaffirmed a "Neutral" rating on the stock.
Elsewhere, Baird analyst Quintin J. Lai, maintained an "Outperform" rating and lifted the stock's price target by $5 to $35. "We see Cepheid's reaffirmed 2011 revenue guidance as conservative," the analyst wrote.
SHARE ACTION: The stock declined 17 cents to $30.54 in morning trading. Shares are up about 35 percent in the year to date, outperforming the broader markets.