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PerkinElmer Reports Q1 Revenues Rise 14 Percent, Buys Geospiza

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market on Thursday a 14 percent jump in first quarter revenues year over year, with its Environmental Health business climbing 20 percent.

Separately, PerkinElmer announced it has acquired genetic analysis software firm Geospiza.

Sales for the quarter ended April 3 totaled $447.9 million, up from $393.6 million year over year, and beating consensus Wall Street estimates of $424.7 million. By segment, Environmental Health grew to $245.9 million in sales, up from $205 million a year ago, while Human Health sales bumped up 7 percent to $202 million from $188.6 million a year ago.

The Waltham, Mass.-based firm's profit for the quarter slid almost 4 percent to $23.5 million, or $.20 per share, compared to $24.4 million, or $.21 per share, during the first quarter of 2010 as expenses rose.

On an adjusted basis, EPS came in at $.34, and beat analyst estimates of $.31.

PerkinElmer's R&D spending increased to $26.3 million during the quarter, up 14 percent from $23. 1 million a year ago, and its SG&A costs climbed to $134.6 million, an 11 percent increase from $121.6 million a year ago.

As of April 3, PerkinElmer had $415.8 million in cash and cash equivalents.

For the second quarter, the company gave guidance of mid-single digit organic revenue growth year over year, and adjusted EPS of $.38 to $.40. For full-year 2011, it forecast organic revenue growth in the mid-single digit range. The firm raised its adjusted EPS for the year to a range of $1.62 to $1.67 from an earlier forecast of $1.56 to $1.64.

In a conference call following the release of its results, PerkinElmer Chairman and CEO Robert Friel attributed growth during the quarter to improving end markets, new products, continued strength in emerging territories, and a focus by the company on fewer but more profitable market segments and applications.

In the Human Health segment, which represents about 45 percent of total revenues, company CFO Frank Wilson said on the call that the diagnostics business improved at a mid-single digit pace organically, with growth in screening "more than offsetting a modest decline" in medical imaging.

The research business within Human Health dropped at a low-single digit rate organically year over year, Wilson said, due to a larger than expected contraction in PerkinElmer's legacy radioisotope portfolio. Excluding that business, the research business grew in the mid-single digits, Friel added.

The company also announced today its acquisition of Geospiza for an undisclosed amount in a deal that supports the recent launch of its next-generation sequencing service.

According to PerkinElmer, the purchase will deliver "an end-to-end solution that provides scientists access to sequencing services and robust analysis and visualization software, offered through significant capability around cloud computing," it said in a statement.

PerkinElmer and Geospiza have been collaborating since the sequencing service was rolled out in January, and on the call Friel said today's deal offers synergies in the "early part of the sample process tracking" as well as on the analysis side.

He added that the deal is in line with the company's strategy to shift toward a business model with greater emphasis on recurring revenues, though the deal is expected to have "minimal" impact on EPS.

"We see informatics as a real opportunity," he said.

Among Geospiza's offerings are GeneSifter Analysis Edition, a cloud-based product for microarray and next-generation sequencing data, and GeneSifter Lab Edition, a software platform that supports laboratory workflows.

The Geospiza buy is the fourth deal that PerkinElmer has announced this year, and the company is open to more. "We can continue to do a couple of hundred million [dollars in deals] if we saw the appropriate targets," Friel said.

Of its sequencing service business, he said that it's still early days, and while PerkinElmer is seeing good traction with customers, through the first quarter, it had generated less than $1 million in revenue.

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