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PerkinElmer Posts 6 Percent Revenue Growth

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market Thursday that its fourth-quarter revenues rose 6 percent, while its bottom line was hit by a large asset impairments charge.

The Waltham, Mass.-based analytical tools firm brought in total revenues of $572.9 million for the three months ended Dec. 30, 2012, compared to $539.3 million for the fourth quarter of 2011, and up 3 percent on an organic basis. It beat Wall Street's estimate of $578.1 million.

Revenues for the firm's Human Health segment increased 6 percent to $274.5 million from $257.7 million year over year. Its Environmental Health segment recorded revenues of $298.4 million, up 3 percent from $281.7 million.

"We are pleased with our strong finish to 2012, particularly in light of difficult year over year comparisons in the fourth quarter," PerkinElmer Chairman and CEO Robert Friel said in a statement. "This performance caps another solid year of revenue growth and adjusted operating margin expansion, which we believe is a result of our differentiated detection, imaging, and informatics portfolios each focused on attractive end markets."

PerkinElmer posted a net loss of $15.9 million, or $.14 per share, for the quarter. The firm's bottom line was negatively affected by a $74.2 million asset impairments charge and a $4 million charge for restructuring and contract terminations. Its adjusted EPS was $.65, matching analysts' consensus estimate.

For the fourth quarter of 2011, the company had posted a net loss of $83.6 million, or $.74 per share. That quarter included a $69.5 million charge tied to defined benefit plan liabilities of divested businesses and a one-time, non-cash tax charge of $79.7 million related to the repatriation of approximately $350 million of international earnings, which was the result of the Caliper Life Sciences acquisition. On an adjusted basis, it had EPS of $.62 for Q4 2011.

PerkinElmer's R&D spending in the quarter increased 6 percent to $33.5 million from $31.5 million, and its SG&A expenses declined 18 percent to $180.7 million from $220.2 million.

"We made excellent progress on our productivity programs to rationalize our production footprint, shift production to lower-cost regions, and better leverage our G&A expenses," Friel said on a conference call following the release of the results.

For full-year 2012, the firm reported revenues of $2.12 billion, up around 10 percent from $1.92 billion, but short of the average Wall Street estimate of $2.14 billion. Its organic revenue growth was 5 percent.

Sales for the Human Health segment grew to $1.04 billion from $884.4 million, while revenues for the Environmental Health segment climbed to $1.07 billion from $1.03 billion.

Its FY 2012 profit was $69.9 million, or $.61 per share, compared to $7.7 million, or $.07 per share, for 2011. On an adjusted basis, its full-year EPS was $2.06, matching analysts' consensus estimate.

PerkinElmer's R&D spending increased to $132.6 million from $115.8 million, while its SG&A expenses increased to $632.7 million from $624.4 million.

The firm finished the year with $171.4 million in cash and cash equivalents.

At the beginning of 2013, PerkinElmer inked a deal to distribute Verinata Health's verify non-invasive prenatal test, providing a complementary offering to the biochemical screening and chromosomal analysis tests marketed by its NTD Labs and Signature Genomics businesses.

"In our assessment of the technology that's out there, we thought Verinata had the best technology and the best test," said Friel. He added that the firm is making some investments in the first half of 2013 to "build out our channel in prenatal [testing] … and train our sales force."

Friel said that some doctors have been asking about the new non-invasive prenatal tests. "I think this is going to be a relatively easy sale for our sales force," he said.

Asked on the call about the firm's acquisition strategy for 2013, Friel said, "I don't see any pressing need to go out and do any large deals. I think what you should expect from us is probably more bolt-ons," adding that the pace of smaller deals would likely increase over the firm's activity in 2012.

PerkinElmer officials said they expect the firm's organic revenues to grow in the 4 percent to 6 percent range in 2013 with EPS between $2.24 and $2.32 for the year.

In advance of PerkinElmer releasing its results investment bank Leerink Swann upped its stock valuation on the firm from $36-$37 to $40-$41. And following the results Goldman Sachs increased its stock price target for PerkinElmer to $42 from $41, while ISI Group raised the price target to $40.50 from $37.50, and RW Baird raised the target to $40 from $33.

In Friday morning trade on the New York Stock Exchange shares of PerkinElmer were down 3 percent at $34.18.