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PerkinElmer Posts 3 Percent Q4 Revenue Growth

NEW YORK (GenomeWeb) – PerkinElmer reported after the market close on Thursday that its fourth quarter revenues increased 3 percent year over year, with growth driven by the firm's environmental health segment.

The Waltham, Mass.-based firm reported total revenues of $608.4 million, up from $591.9 million for the fourth quarter of 2013. It beat the consensus Wall Street estimate of $600 million. The firm also noted that on an organic basis its revenues were up 5 percent year over year.

Sales for its human health segment increased a fraction of 1 percent to $336.2 million from $334.7 million, while sales for its environmental health segment climbed 6 percent to $272.2 million from $257.2 million. On an organic basis, sales for the human health segment were up 3 percent and for the environmental health segment 7 percent.

"We experiences a general strengthening of the business, as we saw good growth throughout all products and geographies, with organic revenue growing 5 percent," Rob Friel, chairman and CEO of PerkinElmer, said on a conference call following the release of the results.

"The global diagnostics markets that we participate in continue to be very good, driven by higher US birth rates, prenatal and neonatal screening menu expansion, and the long-term emerging market demand, especially in China," said Friel.

PerkinElmer posted a profit of $30.8 million, or $.27 per share, versus a profit of $66.9 million, or $.59 per share, for Q4 2013. On an adjusted basis, its Q4 2014 EPS was $.85, easily beat analysts' consensus estimate of $.78.

The company's R&D spending declined 5 percent to $31 million from $32.6 million. Its SG&A expenses jumped 54 percent to $216.6 million from $140.9 million.

For full-year 2014, PerkinElmer reported sales of $2.24 billion, a 4 percent increase from sales of $2.16 billion in FY 2013. Sales for the human health segment rose to $1.24 billion from $1.20 billion, while environmental health revenues increased to $993.8 million from $956.5 million.

Its net income for the year was $157.8 million, or $1.39 per share, compared to net income of $167.2 million, or $1.47 per share, for FY 2013. On an adjusted basis, its EPS was $2.47 for the year, beat the consensus estimate of $2.40.

PerkinElmer's R&D spending for the year dropped to $121.1 million from $132.4 million, while its SG&A expenses climbed to $659.3 million from $581.9 million.

PerkinElmer finished the year with $174.8 million in cash and cash equivalents.

The firm expects Q1 2015 revenue to be between $530 million and $540 million, essentially flat year over year, but with organic growth of 3 to 4 percent. It expects EPS of $.44 to $.46 for the first quarter.

PerkinElmer also guided to FY 2015 revenues between $2.28 billion and $2.32 billion, which assumes organic growth of 3 percent to 5 percent, and a 4 percent foreign currency translation headwind.

It also expects EPS from continuing operations of $2.04 to $2.10. On a non-GAAP basis, it said that range will be between $2.58 and $2.64. It further noted that it expects the stronger US dollar will negatively impact its EPS by around $.15.

"Europe continues to face a weakened economy and should pose similar challenges in 2015 as it did during the majority of last year," said Friel. "The US economy, on the other hand, is improving. Although, the stronger dollar is creating new challenges, especially in emerging markets."

Friel said among the firm's end markets, pharma is stabilizing, "as customers move back into development mode and away from restructuring." He added that the firm expects to see strong pharma and biotech growth in the US and Europe in 2015, while the academic and government sectors will likely stay flat due to soft funding in the US and austerity measures in Europe.

Regarding potential merger and acquisition targets, Friel said on the call that from a priority standpoint, "We'd probably put diagnostics a little bit higher. We like the macro trends there, particularly the areas we operate in. … We like the environmental area, particularly food." Friel also cited informatics, which the firm can leverage across all of its markets.

He said if the firm moved into an adjacent market to ones it already serves, molecular diagnostics might be a potential M&A target.

In Friday morning trade on the New York Stock Exchange, shares of PerkinElmer were up around 3 percent at $46.16.

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