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Salomon Ups Affymetrix to 'Outperform'

Analyst Lakshmi Bhojraj cited the diagnostic products maker robust guidance for 2003

Salomon Smith Barney upgraded Affymetrix (AFFX ) to outperform.

The diagnostics products maker posted seven cents fourth quarter earnings per share (pro forma), and sees $71 million to $73 million in first quarter product revenues.

Analyst Lakshmi Bhojraj says fourth quarter earnings per share beat estimates due to lower selling, general, and administrative costs and lower R&D spending. She says fourth quarter product sales were driven by continued strong growth in GeneChip placements.

More importantly, Bhojraj cited the company's robust guidance for 2003, with continued strength in product sales, manufacturing efficiencies, and tight controls expected to result in product sales growth of 27%, earnings per share of 50 cents (cash), and 44 cents earnings per share (GAAP).

In step with the new guidance, she upped the $305 million 2003 product sales estimate to $330 million, and upped the 40 cents earnings per share (pro forma) estimate to 50 cents. She also raised the 37 cents earnings per share (GAAP) estimate to 44 cents, and hiked her $23 target to $28.

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