Some weakness in Asia put a bit of hurt on Beckman Coulter Inc.’s most recent financial results.
Fullerton-based Beckman’s sales fell less than 1% to $616 million in the period, versus a year earlier, primarily because of the company’s shift to a leasing model.
But Beckman said that revenue in its Far East region was lower than expected,down 7.3% due to shortfalls in Japan and China.
Japanese sales were down more than 20% in the quarter on lower sales for its cellular-related products and in sales to life sciences markets, Beckman said in a release.
Revenue in China was down about 9% in the quarter.
On the other hand, Beckman said that sales in its South East Asia region grew nearly 16% in the quarter.
Beckman has moved to a more direct sales model in Japan through forming a foreign invested commercial enterprise.
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Putting together testing device at Beckman: sales in Japan and China fell in the second quarter |
“This shift has gone slower than expected, with delays in transitioning our dealers, and the need to cope with additional governmental regulations,” said Chief Executive Scott Garrett, in a release. “In addition, hospitals are delaying purchases due to an expanding Chinese government review of overall hospital buying practices.
“We expect to be back on track with our double-digit growth trend as we enter 2007,” Garrett said.
During a call with investors, Garrett said improvement in Japan could come as soon as the second half of the year, saying that what’s needed was “old-fashioned marketing.”
The company’s net profit of $44.6 million was down 19% from a year earlier. Analysts expected Beckman to earn $41.5 million, excluding items, on revenue of $632.3 million.
The Far Eastern slowdown partially led Beckman to lower its sales outlook for 2006 to a range of $2.5 billion to $2.53 billion, up 3% from last year.
Beckman expects its profit to be $176 million to $189 million, in line with previous expectations.
Morgan Stanley & Co. analyst Matt Miksic called the second-quarter results and guidance revision “disappointing, especially given the expectations of a strong quarter.”
Beckman’s shares had rallied during the last two weeks of July amid investors’ expectations for stronger results.
Miksic said he expected Beckman’s shares to remain volatile, at least through the end of the year because of the difficulty in estimating how to account for the leasing changeover, among other things.
The company now recognizes revenue spread out over the life of an equipment contract, rather than booking revenue as a lump sum at the start of the lease.
Silicone Implants: Who to Believe?
A scientific journal that published a study concluding women with silicone breast implants had high levels of platinum in their system is reversing course.
Editors of Analytical Chemistry told Reuters late last month that the study, which was published in May, was “probably flawed” and that its readers should use caution when viewing it.
Implant safety is under scrutiny as Inamed Corp., a unit of Irvine-based Allergan Inc. and rival Mentor Corp. seek approval to resume widespread sales of silicone implants in the U.S.
Those opposed to silicone implants have argued that the Food and Drug Administration should withhold final approval until more studies are done.
The FDA has told Inamed and Mentor that their implants are “approvable,” provided that certain conditions are met.
Breast implants filled with silicone gel have been banned for most American women for nearly 15 years amid concerns over their safety.
The study published in Analytical Chemistry found high levels of platinum in the hair, breast milk, urine and nails of 16 women who had silicone implants for an average of 14 years, compared to five women who don’t have implants.
Researchers also said the platinum was in a form that may be harmful.
One of the study’s authors, Ernest Lykissa, said he stood by the research and said it was being attacked by implant supporters affiliated with the manufacturers.
Lykissa told Reuters that “we have attracted a lot of critics with various biases” and that “none of them have been able to counter data with data, but just opinions.”
Bits and pieces:
Irvine-based Ista Pharmaceuticals Inc. has licensed the North American rights to bepotastine, a drug candidate to treat allergic conjunctivitis, an eye disease, from Japan’s Senju Pharmaceutical Co. Ista is paying Senju $6 million up front, followed by future royalties on product sales for the drug, which is expected to move to late-stage clinical trials early next year. Ista has a past relationship with Senju,it bought the North American rights for its new Xibrom drug from the Japanese company in 2002 … Irvine-based Cortex Pharmaceuticals Inc. said a study on laboratory rats found that its ampakine compounds, which act to increase the strength of signals at connections between brain cells, were able to reverse age-related loss of learning and memory functions in older animals and return them to the level of those seen in younger rats.
