Sequenom (SQNM) Misses [Again] on Earnings

There have been a bevy of earnings this week that I've been reading but have not had the time to discuss on the website. I'll try to get some of them in later this week or next when earnings begin to slow down.

Sequenom (SQNM) reported last night but as I said last quarter [Oct 30: Sequenom Misses But We Don't Really Care], and will say next quarter and the quarter after that ... earnings "today" don't mean diddly in this story. The main focus for Sequenom for now is cash flow and test results.

• Sequenom reported total revenues for the fourth quarter of 2008 of $12.2 million, an increase of 9% compared with total revenues of $11.1 million for the fourth quarter of 2007. The net loss for the fourth quarter of 2008 was $15.4 million, or $0.25 per share, compared with the net loss for the fourth quarter of 2007 of $7.9 million, or $0.18 per share.
• For the fourth quarter gross margin improved to 59.5% from 54.8% in the same quarter last year, due to increased sales of higher-margin consumable products. Operating expenses rose to $21.3 million from $13.5 million in the prior year, due primarily to additional expenses associated with the research and commercial activities related to the company’s Molecular Diagnostic programs and in-licensing activities.

There is some guidance for 2009 but it is limited to only their genetic analysis tools business. This is all a sideshow for now.

With the recent drama and "sell the news reaction" to the latest test results the stock is firmly below the 200 day moving average of $17 and hence poised for more weakness rather than strength from a technical viewpoint, until it gets back north of this area. If the market rolls over Sequenom could be retesting that $13-$14 area from early winter. I might begin a hedge against this just in case since the long position is relatively large.

Long Sequenom in fund and personal account