Cyanotech issues
earnings warning

By Russ Lynch
Star-Bulletin

Shares of Cyanotech Corp. lost more than one-fifth of their value on Wall Street today after the company said it expects to report a significant dip in earnings for its first quarter, which ended today.

Cyanotech shares closed down $1.37-1/2 at $4.94 on the Nasdaq stock exchange. Trading volume was 271,000 shares, nearly six times the average daily volume for the past six months, according to Bloomberg News.

First-quarter revenues are expected to be 20 to 25 percent below those of the year-earlier quarter because of weaker than anticipated export sales of packaged consumer products, particularly to China, the company said.

The Kona-based microalgae products company said it expects to report results for the latest quarter on July 17. In the 1996 quarter, Cyanotech had a profit of $845,000, or 5 cents a share, on revenues of $2.5 million.

Ronald P. Scott, executive vice president and chief financial officer, said the company expects the percentage of profit on the products it did sell was about the same as in last year's first quarter.

But the dip in sales is expected to result in net income and net income per share that are significantly less than those of the equivalent period last year.

Scott said the long-term outlook for Cyanotech's Spirulina products looks strong. The company's products include Spirulina Pacifica, a nutrient-rich nutritional supplement; NatuRose, which is a natural astaxanthin product used in aquaculture; and phycobiliproteins, fluorescent pigments used in medical diagnostics.