Seeking Alpha

After the close today, Affymetrix (ticker: AFFX) said that, "low instrument sales and delays in completing genotyping processing under a services contract," will cause fourth quarter sales to come in $15 million below previous guidance. In addition, the company guided for 15% top-line growth in 2006, which is below the consensus estimate of 23%.

The fourth quarter miss represents the fifth time out of the past six quarters that Affymetrix has announced a financial shortfall. As of today's close, Affymetrix is trading at a 43x forward P/E despite projected earnings growth of 25%, which will obviously come down given the revised guidance. The question is: will this shortfall be the one that finally deflates the perennial optimism?

AFFX 1-yr chart:

Source: Affymetrix Lowers Outlook for Fourth Quarter and 2006 (AFFX)