Celera Revenues Dip

Celera Corporation (CRA: 6.48 +0.34 +5.54%) reported fourth-quarter fiscal 2009 (ended Dec 26, 2009) earnings of 2 cents per share (excluding special items) compared to the Zacks Consensus Estimate of a net loss of 4 cents. The company earned 3 cents (excluding special items) in the year-ago quarter.
 
Net revenues in the reported quarter came in at $40 million as against $47.3 million in the year-ago quarter, down approximately 15.4%. Segment-wise, revenues from lab services fell approximately 25% to $22 million compared to $29.2 million in the year-ago quarter, primarily because of lower reimbursement rates and lower sample volume.

Revenues from products climbed 1% year-over-year to $11.3 million. Corporate revenues, which fell 3% year-over-year, accounted for the balance.
 
Research and Development spending in the reported quarter decreased to $6.5 million from $7.6 million in the year-ago quarter because of the completion of certain research and development projects and associated lower employee-related costs in the corporate and products segments. Selling general and administrative expenses for the quarter came in at $22.4 million compared to $27 million in the year-ago quarter, down 17%.
 
The company had a tax benefit of $9.1 million in the fourth quarter of 2009. Celera exited the quarter with cash and short-term investments of approximately $326 million, compared to approximately $321 million as of Sept 26, 2009.
 
In 2009, Celera suffered a loss of 21 cents (excluding special items) as against earnings of 1 cent (excluding special items) in 2008. The Zacks Consensus Estimate for 2009 was a net loss of 26 cents. Revenue in 2009 fell 4.6% to $167.1 million.
 
Outlook
 
The company expects to incur a loss in the range of $9 million - $11 million or 11 cents � 13 cents per share (excluding special items) in the first quarter of 2010. The Zacks Consensus Estimate for the first quarter of 2010 hints at break-even earnings. Celera projects revenues in the range of $30 million - $32 million in the first quarter of 2010.
 
For 2010, the company forecasts revenues in the range of $145 million - $155 million. The company expects to incur a net loss between $12 million - $17 million or 15 cents -21 cents per share (excluding special items) in 2010. The Zacks Consensus Estimate for 2010 points at earnings of 4 cents.
 
Our Recommendation
 
We have a Neutral outlook on Celera Corporation in the long-term implying that we expect the company to perform in line with the overall U.S. equity market over the next six to twelve months. We advise investors to retain the stock over the time period.