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PerkinElmer Q4 Revenues Flat

NEW YORK (GenomeWeb) – PerkinElmer reported after the close of the market on Thursday that fourth-quarter revenues were essentially flat compared to the same period a year ago.

For the three months ended Jan. 3, the company posted Q4 revenues of $608.1 million, slightly down from $608.4 million for the year-ago period, and falling short of analysts' consensus estimate of $617.5 million.

Net income for the quarter was $68.3 million, or $.61 per share, compared to net income of $30.8 million, or $.27 per share, for Q4 2014. On an adjusted basis, EPS was $.86, compared to $0.85 for the comparable period in 2014, and missing analyst estimates of $.87 a share.

The firm noted that revenues for the quarter were negatively impacted by foreign currency headwinds of $32 million, $5 million more than it had expected. On a constant currency adjusted basis, Q4 revenues were up 5 percent, and organic revenues were up 3 percent, the company reported.

During a conference call following the release of the company's earnings, PerkinElmer CFO Andy Wilson said that the company saw high-single digit organic revenue growth in Asia, while organic revenue in the Americas grew in the low-single digits and Europe was essentially flat "due to very difficult prior period comparisons, specifically in our research and analytical equipment businesses." For the full year, the company posted mid-single digit organic revenues across all major regions, Wilson said.

Fourth quarter revenues for its human health business dipped almost 3 percent year over year to $365.5 million, down from $374.7 million for the same quarter a year ago, while revenues for its environmental health business increased about 4 percent to $242.6 million from $233.7 million a year ago. Organic human health revenues increased 2 percent and organic environmental health revenues increased 5 percent year over year.

The company's human health business represented about 60 percent of reported revenue for the quarter, Wilson said on the call, with diagnostics contributing 27 percent and life science solutions contributing 33 percent of segment revenue. The environmental health business represented approximately 40 percent of PerkinElmer’s reported revenues for the quarter, he added.

R&D expenses dipped slightly to $30 million from $30.9 million for the same period last year, and SG&A spending dipped 27 percent to $158.5 million down from $216.6 million in the year-ago period.

For fiscal 2015, PerkinElmer reported revenues of $2.26 billion, slightly up from $2.24 billion for the year-ago period, and falling slightly short of analysts' consensus estimate of $2.27 billion.

Net income for the year was $212.4 million, or $1.87 per share, compared to net income of $157.8 million, or $1.39 per share, for FY2014. On an adjusted basis, EPS was $2.55, compared to $2.47 for 2014, and missing analyst estimates of $2.57 a share.

The firm again noted that revenues for this period were negatively impacted by foreign currency headwinds of $142 million. On a constant currency adjusted basis, 2015 revenues were up 7 percent, and organic revenues were up 4 percent, the company reported.

Full-year revenues for the human health business were essentially flat at $1.38 billion, while revenues for its environmental health business increased almost 4 percent to $885.7 million from $853.0 million in 2014.

R&D expenses rose almost 4 percent for the year to $125.9 million from $121.1 million for 2014, and SG&A spending fell 9 percent to $598.8 million from $659.3 million.

PerkinElmer ended the year with $237.9 million in cash and cash equivalents, and about $1.6 million in marketable securities and investments.

The company said it expects earnings from continuing operations of $2.21 per share to $2.31 per share in FY2016. On an adjusted basis, it expects EPS of $2.65 to $2.75, which would fall short of current analyst estimates for $2.82 per share.

On the call, Wilson added that PerkinElmer expects its reported revenues to grow organically about 3 percent, or $530 million to $535 million, for the first quarter of 2016, and its adjusted earnings per share to be in the range of $0.49 to $0.51. Analysts expect revenues of $544.2 million in Q1, and earnings of $.56 per share.

"As we enter 2016, I'm excited about the opportunities I see to advance our mission and profitably grow the company," said Chairman and CEO Robert Friel during the call. "The strategic priorities we have set for 2016 support the objective of improving our financial, organizational, and scientific capabilities."

He also commented briefly on the company's recent acquisition of Vanadis Diagnostics, which is developing a non-invasive prenatal testing platform based on digital analysis of cell-free DNA. "After a period of investment, we will be able to offer our customers a next-generation solution that gives wider access for NIPT for expecting mothers, with a cost-effective simplified workflow that many biochemistry laboratories can easily run," he said. 

The company did not disclose additional details about its plans for Vanadis' NIPT platform on the call, but Friel did respond to an analyst's question about the acquisition that it is early days and that PerkinElmer would continue to invest in the technology.

In note, Mizuho Securities USA analyst Eric Criscuolo reiterated the bank's Buy rating on PerkinElmer's stock but lowered the price target for the stock from $58 to $52. "PKI missed consensus estimates and the guide was soft, but end markets look stable and margins are still expanding despite currency and increased R&D investment in 2016," he wrote.  

Leerink Partners analyst Dan Leonard also lowered PerkinElmer's price target, to $53 from $58. Also, he wrote in a note, "we are lowering our outlook for EBIT margin expansion following PKI's expectation for higher investment spending on several key product growth initiatives."

PerkinElmer shares fell more than 6 percent to $43.70 in morning trading on the NYSE.