Cepheid Shares Tank On Weak Outlook

(RTTNews) - Cepheid (CPHD) Tuesday detailed a weak outlook for the third quarter and fourth quarter, sending its shares down a near 12 percent in the after hours trading.

The Sunnyvale, California-based company expects third-quarter loss of about $0.32 per share and adjusted loss of about $0.13 per share.

The larger than expected loss was primarily driven by lower gross margin, which is expected to be around 46 or 48 percent excluding the same items.

Cepheid expects total revenues for the third quarter of about $126.5 million

Analysts polled by Thomson Reuters currently estimate loss of $0.26 per share on revenues of $127.82 million for the quarter. Analysts' estimates typically exclude one-time items.

"We were disappointed with gross margin that fell short of our targets," said John Bishop, Cepheid's Chairman and Chief Executive Officer. "The primary driver was mix, with a higher proportion of lower-margin HBDC business and less commercial business than we projected. In addition, we incurred higher than expected manufacturing costs associated with the ramp-up to volume of our newest virology tests."

For the fiscal year 2015, the company now expects revenues of $537 million to $541 million, down from prior outlook of $544 million to $553 million.

Analysts currently estimate revenues of $549.4 million for 2015.

The company expects fourth-quarter revenue of $146 million to $150 million.

Analysts currently estimate revenues of $156.36 million for the fourth quarter.

CPHD closed Tuesday's trading at $39.61, down $3.73 or 8.61%, on the Nasdaq. The stock further dropped $4.99 or 12.60% in the after-hours trade.