Gen-Probe 3Q profit rises on diagnostic products

SAN DIEGO - Diagnostic test maker Gen-Probe Inc. said late Thursday its third-quarter profit rose 69 percent on higher sales of its clinical diagnostic and blood-screening products, prompting it to boost its full-year outlook.

The company earned $29.1 million, or 53 cents per share, compared with profit of $17.3 million, or 31 cents per share, during the same period a year prior. Revenue rose 19 percent to $121.2 million from $101.7 million.

Analysts polled by Thomson Reuters expected a more modest profit of 46 cents per share on revenue of $120.1 million.

"Gen-Probe posted very good financial results in the third quarter of 2008, driven by solid growth in both our clinical diagnostics and blood screening businesses and substantially improved gross margins," said Chairman and Chief Executive Henry L. Nordhoff, in a statement.

Product sales revenue increased 11 percent, to $108.3 million, with clinical diagnostics revenue rising 7 percent to $55.5 million and blood screening devices revenue gaining 16 percent to $52.7 million.

The company lifted its full-year profit forecast to between $1.91 and $1.93 per share, up from prior guidance of between $1.83 and $1.87 per share. Meanwhile, it now expects revenue between $470 million and $472 million, which is tightened from prior guidance of $467 million to $472 million.

Analysts polled by Thomson Reuters expect profit of $1.86 per share on revenue of $472 million.

In a note to clients Friday, Robert W. Baird analyst Quintin Lai said the company's revenue beat was driven by "solid contributions" from both clinical diagnostics and blood screening, as well as from favorable exchange rates.

Lai maintained an "Outperform" rating on the stock, predicting it will be relatively insulated from a potential slowdown in hospital or laboratory capital expense spending. However, the analyst cut its price target by $2 to $53.

Shares of Gen-Probe rose 72 cents to $46.60 in morning trading Friday.

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