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PerkinElmer Increases Q3 Revenues 8 Percent

NEW YORK (GenomeWeb News) – PerkinElmer reported after the close of the market on Thursday that revenues in the third quarter rose 8 percent year over year, but it missed analyst estimates on the top line.

Total revenues in the quarter ended Oct. 2 rose to $453.7 million, compared to $419.1 million a year ago but fell short of Wall Street estimates of $469.6 million. On an organic basis, revenues were up 4 percent year over year.

The firm has made a number of purchases throughout 2011 and in the quarter those acquisitions contributed more than $20 million to the top line, CFO Frank Wilson said on a conference call after the release of the company's earnings results.

The Human Health segment grew revenues to $207.4 million, up 7 percent from $194.5 million a year ago, while Environmental Health climbed to $246.3 million, a 10 percent increase from $224.6 million a year ago.

On the conference call, Chairman and CEO Robert Friel said that during the quarter, growth was seen across all major geographies and most end markets.

The Waltham, Mass.-based company grew sales in Europe in the low-single digits. While 30 percent of the company's business is tied to Europe, Friel said that much of that is in end markets that will not be significantly impacted by the challenging macroeconomic environment there. Only about 5 percent of total revenues is tied directly to government spending that could be exposed to austerity measures in Europe, he said.

The US grew in the mid-single digits, and while macro conditions will be challenging, he said that the company is seeing improving birth rates, which could benefit its newborn screening business, and continued demand for environmental and safety products.

The US academic/government end market represents about 10 percent of revenues, with a large portion of PerkinElmer's exposure in that market in the newborn screening space, which is primarily state funded. Friel said that as long as he's been with the company, he has never seen a decline in funding for newborn screening from states, and in the third quarter, PerkinElmer's newborn screening business grew.

In developing geographies, business rose in the double-digits, and PerkinElmer expects that to continue, Friel said.

"Due to the nature of our end markets, our global diversity, and strong customer relationships, we believe that we can continue to grow should economic conditions become more challenging," he said.

Within Human Health, the diagnostics end market rose organically in the mid-single digits during the third quarter, compared to a year ago, Wilson said.

The research end market retreated at a low-single digit clip organically, however, due to soft pharma sales in developed geographies. Friel added that the company hopes that its pending acquisition of Caliper Life Sciences will counter that. In particular, Caliper's imaging business is expected to help attract more pharma business, he said.

In Caliper's third-quarter earnings release on Wednesday, the company said that the deal is expected to close Nov. 7.

PerkinElmer's R&D spending ticked up 27 percent year over year during the third quarter to $30.2 million from $23.8 million, and SG&A expenses increased 12 percent to $135.1 million, compared to $120.6 million a year ago.

Its profit for the quarter shot up to $35.3 million, or $.31 per share, compared to $13.4 million, or $.11 per share, in the year-ago period. The firm posted $8.6 million in income form discontinued operations and dispositions in the quarter, compared to a loss of $13.2 million for such items in Q3 2010.

On a non-GAAP basis, EPS of $.41 edged out Wall Street's consensus estimate of $.39.

PerkinElmer finished the quarter with $248.1 million in cash and cash equivalents and $1 million in marketable securities and investments.

For the fourth quarter, Wilson gave EPS guidance of between $.49 and $.51.

The company said that organic revenue is anticipated to grow in the mid-single digit rate for full-year 2011, compared to full-year 2010, and gave a GAAP EPS from continuing operations estimate of between $.94 and $.96. On an adjusted basis, it raised guidance on the low end to between $1.66 and $1.68 from an earlier guidance of between $1.64 and $1.68.

Shares of PerkinElmer fell 5 percent to $19.62 in early Friday trade on the New York Stock Exchange.

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