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PerkinElmer Q3 Revenues Increase 3 Percent

NEW YORK (GenomeWeb News) – PerkinElmer's third quarter revenues increased 3 percent year over year, the firm reported after the close of the market on Wednesday.

For the three months ended Sept. 29, total revenues rose to $524.3 million from $509.6 million a year ago. Analysts, on average, expected revenues of $523.8 million.

On an organic basis, revenues rose 2 percent year over year, PerkinElmer Chairman and CEO Robert Friel said on a conference call following the release of the results.

The Human Health segment posted revenues of $292.4 million, compared to $287.3 million a year ago, a 2 percent increase, PerkinElmer said, while Environmental Health saw revenues climb 4 percent to $231.9 million from $222.4 million.

PerkinElmer CFO Andy Wilson said on the call that within Human Health, the diagnostics business saw low-single digit growth in organic revenues year over year. While medical imaging declined in the quarter, the rest of diagnostics was up. Also within Human Health, the research business grew in the low-single digits organically.

In Environmental Health, laboratory services grew in the mid-single digits, while the industrial and environmental services businesses were each up in the low-single digits, Wilson said.

By end market, pharma/biotech was up in the high-single digits "aided by our informatics and service offerings," Friel said. Clinical screening and infectious disease rose in the mid-single digits on low-single digit growth in US birth rates, while demand in China continued to be strong.

The environmental, safety, and industrial end markets were up in the low-single digits, and the academic end market was down in the mid-single digits "as budget pressures continued to dampen demand," Friel said.

Wilson said that recurring revenues company-wide were up in the high-single digits, while instruments were down in the mid-single digits.

Meanwhile, the Caliper business, which PerkinElmer purchased nearly two years ago, grew in the mid-single digits during the quarter, which was below the historical growth rate. Friel attributed that to the effects of sequestration.

The buy of Caliper was to help PerkinElmer build its presence in the front end of the next-generation sequencing workflow, and on the call Friel said that the company continues to see opportunities in automation and sample preparation, "and we'll continue to innovate there. It's an area we continue to make significant investments," and PerkinElmer plans on new products introductions in 2014 to address those markets.

Also, on the NGS back end, the company will continue to leverage its buy of Geospiza, as well as its relationship with Tibco Software, he added. Earlier this month, PerkinElmer and Tibco announced PerkinElmer will be the exclusive channel for the Tibco Spotfire software for use in clinical research and development applications.

In the third quarter, PerkinElmer posted a profit of $40.2 million, or $.36 per share, during the quarter, up from a profit of $29.6 million, or $.26 per share, a year ago. Adjusted EPS was $.49, edging out the consensus Wall Street estimate of $.48.

PerkinElmer's R&D spending was trimmed 3 percent to $31.5 million from $32.4 million, while SG&A costs were down 1 percent to $143.6 million from $145.4 million.

The company finished the quarter with $132.3 million in cash and cash equivalents.

For full-year 2013, it reaffirmed its guidance for organic revenue growth in the low-single digits year over year. GAAP EPS is projected to be in the range of $1.42 to $1.45. Non-GAAP EPS guidance was narrowed to a range of $2.04 to $2.07 from a previous range of between $2.03 and $2.10.

Adjusted EPS in the fourth quarter is expected to be between $.68 and $.71, Wilson said.

He noted on the call that the company has begun seeing softer performance in certain emerging markets, including India and Southeast Asia, where currency fluctuations have negatively affected capital spending.

Additionally, a "large majority" of PerkinElmer's large instruments require a government export license to be shipped overseas. The recent US government shutdown has created a backlog for such licenses, and the company continues to work through the backlog, which is expected to negatively impact fourth quarter revenues.

The total impact from those two factors is expected to be in the range of $10 million to $12 million in the fourth quarter, Wilson said.

Into 2014, however, Friel said that he anticipates a return to mid-single digit growth in organic revenues on better year-over-year comparisons in some businesses, such as medical imaging. In other areas, new product introductions and "fundamental changes in the businesses" will drive growth.

"While I remain encouraged by the resiliency we are seeing across much of the portfolio, the global economic environment remains challenging," he said in a statement. "We believe, however, that the growth and productivity investments deployed over the past year should help us in the successful delivery of our full-year commitments as we build a strong foundation for the future."