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PerkinElmer Posts 14 Percent Revenue Growth, Ups EPS Guidance

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market Thursday that its second-quarter revenues increased 14 percent year over year with double-digit growth for both its Human Health and Environmental Health segments.

The Waltham, Mass.-based firm reported total revenues of $479.5 million for the three-month period ended July 3, compared to $421.6 million for the second quarter of 2010. On an organic basis, its revenues were up 6 percent year over year. PerkinElmer easily beat analysts' consensus forecast for revenues of $477.6 million.

Sales for the Human Health segment increased 11 percent, or 2 percent on an organic basis, to $219.2 million from $197.5 million for Q2 2010. Revenues for the Environmental Health segment jumped 16 percent, or 9 percent organically, to $260.2 million from $224.1 million.

In a conference call following the release of the financial results, PerkinElmer CEO Rob Friel credited expansion in emerging markets, such as China, the Middle East, and Africa, with targeted applications for some of the firm's growth in Q2. He noted that PerkinElmer launched high-sensitivity kits for hepatitis and sexually transmitted diseases in China and the first orders for its sickle cell anemia screening products in Africa as examples.

For the second half of the year, Friel said he expects the firm's environmental and food safety end markets to continue to grow, despite challenging economic conditions, and he expects that within its Human Health segment its diagnostics business will gradually improve as US birth rates stabilize.

Friel also noted that the firm has less exposure to the academic spending market than many of its competitors — roughly 5 percent of its sales. As a result, PerkinElmer isn't as impacted by spending trends in that market, which others have noted has been down in the past quarter.

"I think historically, we've been underrepresented in the academic area of research because a lot of our products were more tailored to pharma and biotech," said Friel. "It was a strategy, probably about 12 months ago that we started to adjust some of our product portfolio to do better in academic markets."

PerkinElmer posted net income of $28.6 million, or $.25 per share, compared to net income of $57.6 million, or $.49 per share, for Q2 2010. Last year's second-quarter included a $25.6 million gain tied to the acquisition of the remaining half of a mass spec joint venture the company had with MDS.

On a non-GAAP basis, its EPS for Q2 2011 was $.42, up from $.33 from the comparable period of 2010. Analysts had expected EPS of $.40.

The firm's R&D spending for the quarter increased 23 percent to $28.2 million from $22.9 million, and its SG&A spending rose 14 percent to $140 million from $123.3 million. Its restructuring and lease charges totaled $3.3 million versus $9.8 million for Q2 2010.

PerkinElmer finished the quarter with $395.2 million in cash and cash equivalents.

The company said that it expects full-year revenue growth to be in the mid-single-digit range compared to 2010. It upped its non-GAAP EPS guidance range to between $1.64 and $1.68 from a previous range of $1.62 to $1.67.

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