Immucor Investors Out For Blood

It's not uncommon for Wall Street to strike unspoken bargains with certain companies in the healthcare space; If companies provide reliable, by-the-numbers performance, they will receive rich valuation multiples in return. That deal worked well for specialty diagnostics company Immucor (Nasdaq:BLUD) and its shareholders for many years, but has fallen apart since the company was beset by problems starting in 2009. Although the company had been making some progress, this latest quarterly report is likely to send the stock straight back to the penalty box for some time. (For background reading, see The Ups And Downs Of Biotechnology and Investing In The Healthcare Sector.)

The Quarter That Was
Immucor reported that sales rose only 1% for the fiscal first quarter, falling slightly short of the average estimate on the Street. Although the company saw decent growth in instrument sales (up 18%) with the ongoing launch of the Neo, traditional reagent sales fell 9%. That's a problem given that this figure represents almost 60% of total revenue. Capture reagent sales did better, though, with 18% growth. What was more worrisome was the company's shortfall in instruments and the lower guidance for system sales throughout the year. New machine sales fuel future reagent sales, so a reduction in system sales has broad implications for future profits.

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http://stocks.investopedia.com/stock-analysis/2010/Immucor-Investors-Out-For-Blood-BLUD-BIO-GENZ-BSX-ABT-GPRO1007.aspx

I hope these guys get it all sorted out. I followed the stock as an analyst, and there are some very good people working there. 

By the way, Johnson & Johnson (JNJ - which I own) is the other half of the U.S. blood typing duopoly. Because I own the stock, I could not mention that in the piece...