Shares of Sequenom Inc. slid Friday, a day after the diagnostic test maker reported a wider second-quarter loss and revenue that missed Wall Street expectations.
THE SPARK: The San Diego company said Thursday after markets closed that it lost $29.6 million, or 26 cents per share, in the three months that ended June 30. That compares with a loss of $20.9 million, or 21 cents per share, in last year's quarter.
Revenue jumped 37 percent to $18.2 million, and the company's operating expenses also climbed more than 17 percent to $35.1 million.
THE BIG PICTURE: Sequenom makes MaterniT21, a blood test intended for women who are at high risk of carrying a fetus with Down syndrome. Sequenom says the test can detect the chromosomal anomaly that causes Down syndrome as early as 10 weeks into pregnancy. It is intended to be less invasive than other forms of testing.
The company said Thursday its test volumes increased, but it saw tighter profit margins because the company recorded expenses for the services in the quarter, but it won't record revenue until it is received.
THE ANALYSIS: Analysts surveyed by FactSet expected, on average, a loss of 21 cents per share on $19.1 million in revenue.
Wedbush analyst Zarak Khurshid said it looks like average collections per test may have fallen slightly compared to the previous quarter, but calculating an accurate reimbursement level was "virtually impossible" due to the gap between spending and the revenue collection.
He said testing volumes were growing fast, but the company was still collecting payments from services performed several months ago, and it has only been collecting "meaningful" revenue for the past couple quarters. That makes it difficult for analysts to get a sense for any trends.
SHARE ACTION: Down 7.7 percent, or 28 cents, to $3.37 in midday trading, while broader trading indexes climbed slightly.