Life Technology: Earnings Miss and Investors Don't Get A Dividend
(Thomson Reuters ONE) -
Life Technology's (NASDAQ:LIFE) second quarter's earnings miss was
disappointing, with the company reporting adjusted earnings per share of $0.96
and revenues of $949 million, versus analyst expectations of $0.97 and revenues
of $945 million, respectively. The minuscule 1% revenue growth in the period and
earnings underperformance was primarily due to declines in sales of the
company's SOLiD product line and lower qPCR royalties, which were expected, plus
foreign exchange effects. A higher gross margin vs. last year's period (albeit
slightly lower than estimates) drove 8% growth on the bottom line. Because of
the strengthening dollar and business pressures in Europe, the company lowered
the top end of its anticipated full year EPS range from $3.90-$4.05 to $3.90-
$4.00. These business headwinds and push-back of a large contract from the third
to the fourth quarter also caused the company to guide to lower-than-expected
third quarter earnings. Importantly, the company had been communicating that it
plans to return cash to shareholders, leading the Street to believe that a
dividend would be forthcoming to support the lower-growth stock while new
products ramp up and the base business gets through its issues.
Last night's announcement that LIFE authorized a $750 million share buyback
program and no dividend was clearly a disappointment. Analysts were unimpressed
with the company's share count guidance, which implies a less-aggressive buy
back program through the end of the year. Low relative growth expectations,
business headwinds, time needed to see new products ramp, and no dividend are
reasons that shares of LIFE could be weak today, despite some analysts defending
the stock on a ~10% free cash flow yield. For a great value, look to buy shares
of LIFE under $40.
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Datum: 01.08.2012 - 17:02 Uhr
Sprache: Deutsch
News-ID 170867
Anzahl Zeichen: 3068
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Town:
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