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Affymetrix Warns

Low production yields on a key product punish the stock.
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dropped 9% after slashing third-quarter revenue guidance in light of manufacturing issues.

The Santa Clara, Calif., genetic analysis outfit said sales of its 500K Mapping Array Set were being held back by what it called low initial-production yields. Affymetrix said the product is its most advanced commercial product, and that as a result of the problems third-quarter revenue will fall short of targets by $10 million to $12 million.

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Analysts surveyed by Thomson First Call were expecting revenue of roughly $95 million for the quarter ending Friday.

"During the third quarter, we experienced unusually low manufacturing yields on our new 500K Mapping Array Set," said CEO Stephen Fodor. "While we have recently seen improving yields, these improvements occurred late in the quarter and we now project that we will be unable to manufacture enough product to meet our revenue target."

Late Tuesday, Affymetrix shares fell $4 to $38.46.