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PerkinElmer Posts 4 Percent Gain in Q3 Sales

NEW YORK (GenomeWeb) – PerkinElmer reported after the close of the market Thursday that its third quarter revenues increased 4 percent year over year.

The firm posted total revenues of $542.0 million for the three months ended Sept. 28, up from $522.1 million for Q3 2013. It fell short of the average Wall Street estimate of $550.4 million.

PerkinElmer said that its Human Health segment generated sales of $301.5 million, a 4 percent increase over revenues of $290.2 million for the third quarter of 2013, while its Environmental Health segment also reported a 4 percent increase to $240.5 million from $231.9 million.

"In diagnostics we grew low-double digits as we continue to benefit from improving birth rates and increasing purchasing power of the middle class outside the US, which is creating a nice tailwind for our newborn and prenatal screening and infectious disease testing solutions," Chairman, President and CEO Robert Friel said on a conference call following the release of the results. "During the third quarter, these three product lines actually drove more revenue outside the US than within."

He said he expects this trend to continue, as the firm has signed up several international customers that it expects will drive its diagnostics business deeper into new markets.

PerkinElmer's research products business declined in the low-single digits in the third quarter. Low-single digit growth in pharma and biotech was offset by softness in academic end markets, which were down in the low-single digits, CFO Frank Wilson said on the call. "A bright spot within the research business was the performance of our microfluidics franchise, up double digits in the quarter," he added.

Friel noted two parts of its business that hampered academic sales. He said that PerkinElmer's radiochemical business continues to be a drag, and he noted that the firm is no longer collecting some royalty revenues associated with its in vivo imaging business that it had historically collected.

The firm's lab services business saw revenues grow in the high-single digits, and its industrial and environmental and safety business grew in the low-single digits.

The acquisition of Cibea Solutions announced earlier this week "will help expand our deep software and services solution with lab IT capabilities, focused on lab computing, applications management, and scientific development," said Friel. Like its diagnostics business, PerkinElmer's service business grew faster outside the US, said Friel, with high-teens growth in the Asia-Pacific region.

Friel also noted that sales in China fell slightly below expectations. "In China … diagnostics has continued to do very well, really unimpacted by any of the overall slowdown," he said, adding that food safety product sales "lagged a little bit."

The firm is seeing improvement in orders and tenders in China, said Friel, but it is being cautious about its expectations there for the fourth quarter.

PerkinElmer posted a profit of $42.3 million, or $.37 per share, versus net income of $40.2 million, or $.36 per share, for the comparable period in 2013. On an adjusted basis, its EPS was $.57 per share, matching analysts' consensus estimate.

The firm spent $30.4 million on R&D in the quarter, down 3 percent year over year from $31.4 million. Its SG&A spending was nearly flat at $143 million versus $142.8 million. It also reported restructuring and contract termination charges of $11.1 million compared to $1.1 million for such charges in Q3 2013.

PerkinElmer finished the quarter with $203.7 million in cash and cash equivalents.

The firm expects its FY 2014 EPS to be between $1.80 and $1.82, and it has lowered its guidance for adjusted EPS to a range between $2.39 and $2.41 from a previous $2.42 to $2.46.

PerkinElmer also noted that its board of directors approved a new share repurchase program for up to 8 million shares of the company's common stock that will expire on Oct. 23, 2016, unless terminated earlier. The repurchase program replaces its share repurchase program that expired on Oct. 24, 2014.

In early Friday trade on the New York Stock Exchange, shares of PerkinElmer were up a fraction of 1 percent at $43.47.