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PerkinElmer's Q4 Revenues Rise 3 Percent

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market on Thursday that its fourth-quarter revenues grew 3 percent, but the firm forecast that its 2009 revenues would be flat or down mid-single digits compared to 2008.

The Waltham, Mass.-based firm brought in revenues of $495 million for the three-month period ended Dec. 28, up 3 percent from revenues of $480.7 million for the fourth quarter of 2007. Sales for its Life and Analytical Sciences segment increased 3 percent year over year to $390.3 million from $379.3 million, while sales for the Optoelectronics segment also rose 3 percent to $104.8 million from $101.4 million.

During the firm's conference call on Thursday, PerkinElmer President and CEO Robert Friel said that the firm's research products business grew in the mid-single digits in 2008. He said that even though large pharmaceutical firms are expected to "hold spending flat," academic and large biotech firms would still be a source of growth for its instruments and reagents. As such, Friel predicted that the research market would provide revenue growth around the low- to mid-single digits throughout 2009.

He also predicted that the firm's diagnostics business would be flat or plus or minus 2 percent growth for 2009. "State funding constraints has limited the near-term growth opportunities for our neonatal screening business in the US, as state labs defer the expansion of the number of tests applied to each newborn, as well as reduce safety stock levels of our reagents and consumables," said Friel during the call.

He noted that such a pullback in genetic testing is not evident in markets outside the US.

PerkinElmer posted a profit of $30.7 million, or $.26 per share, for Q4 2008, down from a profit of $52.6 million, or $.44 per share, for the fourth quarter of 2007. The firm's interest expense for the quarter was $24.3 million versus $5.4 million in Q4 2007.

The company's R&D expenses declined 7 percent to $25.1 million from $26.9 million, while its SG&A spending decreased 4 percent to $120.5 million from $125.7 million.

For full-year 2008, PerkinElmer reported revenues of $1.94 billion versus $1.7 billion. Its net income was $126.4 million, or $1.07 per share, compared to $131.7 million, or $1.09 per share, for full-year 2007.

The firm's 2008 R&D spending rose 4 percent to $108.1 million from $104 million year over year, while its SG&A spending rose 19 percent to $522.9 million from $439.8 million.

PerkinElmer finished the year with $179.1 million in cash and cash equivalents.

Company officials said that they expect the firm to report 2009 organic revenues that are flat to down mid-single digits. They also expect 2009 EPS to be down mid-single digits to mid-teens.

PerkinElmer announced in November that as of Jan. 1, 2009, it would realign its businesses and operate under two new segment names: Human Health and Environmental Health.

The Human Health business develops diagnostics, tools, and applications for biomedical research and drug discovery. This business will include the company’s Genetic Screening, Bio-discovery, and Medical Imaging operating units.

The Environmental Health business is focused on product safety and energy efficiency. It will include the company’s Analytical Sciences, Laboratory Services, and Detection and Illumination (formerly known as Sensors and Specialty Lighting) operating units.

PerkinElmer said Thursday that as a result of the realignment it will divest a portion of its specialty lighting business and that it has "decided to exit certain product lines within its Bio-discovery business and reallocate resources to higher growth strategic opportunities within that business."

Friel said during the call that the Bio-discovery product lines the firm was dropping include products focused on proteomics and genomics, including array scanners. He said those products brought in only around $6 million to $7 million for the year. PerkinElmer's Bio-discovery efforts shifted over the past few years to a focus on cellular research.

The businesses that are being discontinued, including the specialty lighting products, account for around $90 million in annual revenue, said Friel.

Following PerkinElmer's conference call last night, Thomas Weisel Partners analyst Peter Lawson downgraded the firm's shares to "market weight" from "overweight," citing among other factors a negative growth profile in 2009.

In Friday trade on the New York Stock Exchange, shares of PerkinElmer closed down 14 percent at $12.62.

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