Life Technology: Earnings Miss and Investors Don’t Get A Dividend

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. (more…)