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PerkinElmer's Q2 Revenues Rise 4 Percent

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market Thursday that its second-quarter revenues increased 4 percent year over year, beating Wall Street estimates on the top and bottom line.

The Waltham, Mass.-based firm brought in total revenues of $543.3 million for the three months ended June 30, compared to $521.8 million for the second quarter of 2012. Analysts, on average, had expected revenues of $533 million.

Its organic revenue growth for the quarter was 3 percent.

Sales for both of the firm's reporting segments increased 4 percent. Its Human Health segment reported revenue of $300 million, up from $287.8 million, while the Environmental Health segment saw sales increase to $243.4 million from $234 million.

"I am encouraged by our performance in the second quarter as we exceeded our adjusted revenue and adjusted operating profit forecasts despite a challenging global environment," Robert Friel, chairman and CEO of PerkinElmer, said in a statement. "We were able to deliver sequential revenue improvements in the areas that were under pressure in the first quarter while the remaining portfolio continued to perform well."

In the first quarter, PerkinElmer's revenues had fallen 1 percent year over year as the effects of sequestration in the US hit its imaging business, along with weakness in Japan, and a decrease in sales of environmental instruments in Western Europe.

"Areas of strong growth included our newborn and infectious disease screening business, which benefited from further penetration into emerging markets," Friel said on a conference call following the release of the results. "Out informatics business continued to grow double digits, including significant momentum in Spotfire."

He also noted that revenue from the firm's OneSource service business grew in the high-single digits in the quarter.

The firm's medical imaging business had a mid-single-digit decline, said Friel, who noted that company believes that part of its business will be flat in 2013 year over year, but also "will experience significant volatility quarter-to-quarter during this year."

Friel also said on the call that PerkinElmer's efforts in marketing Verinata's Verifi non-invasive prenatal test for detecting trisomy 21, 18, and 13 are not expected to have a material impact in 2013. However, "we feel very good about the rapid and successful contracting with the managed care providers for the Verifi test," he said.

He further noted that PerkinElmer signed a coverage deal with Cigna on Thursday for the Verifi test. Friel said the firm is "now over 130 million contracted lives. Clearly, the most covered of any provider in NIPT."

Friel was asked on the call about reimbursement for the test, amid challenges being noted throughout the industry for reimbursement of molecular diagnostic tests, and replied that PerkinElmer had factored in the changes made at the beginning of the year by the Centers for Medicare & Medicaid Services.

"We feel very good about the pricing we're getting, and clearly the average rate we're seeing is higher than what we had originally anticipated in our financial models," said Friel.

PerkinElmer posted a profit of $27.9 million, or $.25 per share, for the quarter, compared to $33.6 million, or $.29 per share, for Q2 2012. On an adjusted basis, EPS was $.51 versus $.53 a year prior and beat the consensus Wall Street estimate of $.48.

The firm's R&D spending increased a little more than 1 percent to $34.6 million from $34.1 million, while its SG&A expenses decreased a fraction of 1 percent to $148.8 million from $149.7 million. The company also reported $19.3 million in charges for restructuring and contract terminations, compared to $5.2 million for such charges in last year's second quarter.

During the quarter, PerkinElmer completed product line transfers to China and Singapore in an effort to "rationalize our global footprint," said Friel. He also noted that the firm had consolidated three North American facilities, "and efforts are underway to consolidate two additional legacy Caliper sites, further simplifying our operational footprint and improving our R&D efficiency."

PerkinElmer reduced its workforce by 62 employees during the first quarter of this year as part of a restructuring plan aimed at focusing resources on higher growth end markets.

PerkinElmer finished the quarter with $112.5 million in cash and cash equivalents.

For full-year 2013, PerkinElmer expects organic revenue growth in the low-single digit range. It expects non-GAAP EPS of between $2.03 and $2.10, narrowing its previous guidance of $2.00 to $2.10.

In Friday morning trade on the New York Stock Exchange, shares of PerkinElmer were up more than 4 percent at $36.62.

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