Biosite Q3 Earnings Overview (BSTE)

On October 25th, Biosite (ticker: BSTE) reported Q3 results that were largely in-line with expectations. However, BNP sales came in lower than expected as the historically weak third quarter exhibited exceptional seasonality. In addition to average selling prices dropping 8%, BNP utilization also experienced a significant drop in utilization despite a company marketing study that suggested mid-20% growth in utilization. Management acknowledged the exceptionally weak quarter could be the result of a shift in its customer base from high volume accounts to lower volume accounts. In response to a question on management's earnings conference call about the weakness in the quarter, Tom Watlington, EVP and COO stated:

“… it does appear that there have been higher-volume accounts lost in all of the bed size categories. And it's impossible to know in addition precisely to what extent seasonality is contributing in the sequential decline. But it does seem to be a particularly strong seasonal effect, in combination with this shift into lower utilization overall. And so, we will have a better sense of the relative contribution of these factors after we see the next quarter's results.