Nichols Institute 3rd-Quarter Profits Less Than Expected

SAN JUAN CAPISTRANO —  Hurt by a slackening demand for laboratory testing services by hospitals, medical care facilities and physicians, Nichols Institute said Thursday that its earnings for the third quarter ended Sept. 30 will be lower than expected.

The company is projecting quarterly sales of between $62 million and $63 million and earnings per share of between 8 cents and 10 cents. Several analysts anticipated earnings per share of 14 cents for the quarter, the company said.

Albert L. Nichols, chairman and president, attributed the earnings decline to an unanticipated drop in demand for laboratory testing and to continued losses at the company’s Dallas joint-venture laboratory.

The third quarter usually is the company’s slowest period, said James W. Whitmer, chief financial officer. But demand for lab testing services was smaller than usual, possibly due to the recession.

“Our expectation is that this is a temporary aberration rather than a permanent situation,” Whitmer said.

The company’s sales for the third quarter is expected to be about 40% higher than the $44.7 million recorded in the corresponding period last year, Whitmer said. The projected higher sales are largely due to the acquisition of MPC Laboratories Inc., a laboratory testing company in Houston that Nichols purchased for $7 million in cash, he said.