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PerkinElmer Q4 Revenues Up 10 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market on Thursday that its revenues climbed almost 10 percent in the fourth quarter.

For the three months ended Jan. 2, the firm said revenues totaled $470 million, compared to $428.5 million for the year-ago period. It exceeded consensus Wall Street estimates of $461.3 million.

Growth in both its Human Health and Environmental Health segments was strong. Human Health revenues increase to $215.7 million, a 12 percent jump from almost $193 million a year ago, while Environmental Health revenues spiked 8 percent to $254.2 million from $235.5 million.

In Human Health, organic growth was 10 percent with the diagnostics business growing in the mid-teens, led by medical imaging and maternal and newborn health, Robert Friel, chairman and CEO of PerkinElmer, said during a conference call after the release of its earnings.

In the research markets, the company grew in the mid-single digits led by the academic market and "strong growth" in cellular imaging, he said.

Frank Wilson, CFO for PerkinElmer, added during the call that in the company's screening business, growth occurred across all major geographies and all major product offerings.

"We were particularly pleased by the strong neonatal growth that we experienced in the US given the backdrop of historically low birthrates experienced earlier in the year," he said.

Recurring revenues grew in the high-single digits organically during the fourth quarter, while instruments grew in the low-double digits, he said.

The Environmental Health segment grew 9 percent organically, driven by "strong demand" related to more stringent regulations for environmental and food safety.

PerkinElmer's R&D costs in the quarter inched up to $25.6 million from $23.7 million in the fourth quarter of 2009, an 8 percent jump, while SG&A costs rose 4 percent to $125.3 million, compared to $120.6 million a year ago.

For the fourth quarter, PerkinElmer posted net income of $288.5 million, or $2.46 per share, a seven-fold increase from a profit of $39.9 million, $0.34 per share a year ago. During the quarter, the company completed the divestiture of its Illumination and Detection Solutions business, resulting in a pre-tax gain of $315.3 million.

On an adjusted basis, PerkinElmer had EPS of $0.44, compared to $0.37 for Q4 2009, beating Wall Street estimates of $0.41 per share.

For full-year 2010, the company's revenues grew to $1.70 billion, up 10 percent from $1.55 billion in 2009, as Human Health grew 9 percent to $796.3 million from $731.6 million. The Environmental Health business climbed 11 percent to $908 million from $819.1 million.

PerkinElmer's net income for the year came in at $383.9 million, or $3.25 per share, compared to $85.6 million, $0.73 per share, for the previous year. Adjusted EPS was $1.33, compared to $1.07 in 2009, and above analyst estimates of $1.31.

The firm's R&D spending rose 5 percent to $95.4 million from $90.8 million, and SG&A costs also increased 5 percent to $490.7 million from $468.3 million.

As of Jan. 2, PerkinElmer said it had $420.1 million in cash and cash equivalents.

For 2011, it expects organic revenue to increase in the mid-single digit range over 2010. EPS is expected to be in the $1.19 to $1.27 range. On an adjusted basis, it gave guidance of between $1.56 and $1.64.

Earlier this month, the company moved into the next-generation sequencing space with the launch of DNA sequencing and data analysis services. During the call, Friel said that the company has customers for the business already and is generating revenue, though in small amounts.

The service is complementary to other products offered by the company, such as sample prep and liquid handling applications, "but I think more importantly, as we think about being in human health … historically we're much more focused on the protein analysis side of things," said Friel. "But I think it's going to be increasingly critical to have analysis capabilities around DNA or genes."

Sales from the business will ramp up throughout the year but isn't expected to contribute significantly to PerkinElmer until 2012 or 2013, he added.

On the mergers and acquisitions front, Friel said the company has a "solid and expanding pipeline of potential acquisition targets that we're actively engaged [in] and reviewing. Our acquisition priorities are to build out the breadth and footprint of our [perinatal] markets with particular emphasis in broadening our offerings in services, reagents, consumables, and software."

In early morning trade Friday on the New York Stock Exchange, shares of PerkinElmer rose around 3 percent to $26.68.

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