PAREXEL Up on Acquisition of Clinical Research Company - Analyst Blog

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Shares of PAREXEL International Corporation ( PRXL ) rose nearly 1% following the announcement of its acquisition of Istanbul, Turkey-based privately owned clinical research services provider ATLAS Medical Services. The all-cash acquisition will strengthen the position of PAREXEL in Turkey, the Middle East and North African markets.

Founded in 2005, ATLAS operates with more than 28 biopharmaceutical services companies including the Top 10. It has therapeutic expertise in areas such as Oncology, Hematology, Endocrinology, Cardiovascular, Anesthesiology, Infectious Diseases and the Central Nervous System and provides services for all phases of clinical development.

ATLAS also provides clinical trial-related services, ranging from study planning and feasibility to site selection, data management and medical writing. These apart, it provides regulatory services and support product registration. Last year, ATLAS generated revenues of $4 million.

PAREXEL will integrate ATLAS' business into its Clinical Research Services business. However, it is not going to materially impact PAREXEL's revenues and earnings per share in fiscal 2015.

In the fiscal 2014-third-quarter, PAREXEL reported adjusted earnings per share of 56 cents, beating the Zacks Consensus Estimate by 3 cents. Earnings per share grew 12% from 50 cents in the year-ago quarter. Adjusted net earnings rose 9.5% to $32.3 million from $29.5 million in the prior-year quarter.

Revenues increased 10.4% to $578.0 million from $523.5 million in the third quarter of fiscal 2013, comfortably beating the Zacks Consensus Estimate of $492 million. PAREXEL's backlog was approximately $4.9 billion at the end of Mar 2014, an increase of 9.4% year over year.

PAREXEL ended fiscal 2014-third quarter with cash and marketable securities of $298.7 million, up 3.6% from $288.4 million as of Mar 31, 2013. The company's long-term debt decreased 25.6% to $290.0 million from $390.0 million as of Mar 31, 2013. Consequently, long-term debt-to-capitalization ratio fell 11.2 percentage points to 30.2% from 41.4% a year ago.

For fiscal 2014, PAREXEL raised its adjusted earnings per share guidance to a range of $2.11 to $2.15 from the prior range of $2.01 to $2.11. The current Zacks Consensus Estimate of $2.14 lies within the guided range.

PAREXEL also raised its revenue guidance for fiscal 2014 to a range of $1,936 to $1,942 million from the prior range of $1,920 to $1,930 million. The current Zacks Consensus Estimate of $1,937 million also lies within the guided range.

Currently, PAREXEL has a Zacks Rank #1 (Strong Buy). Other medical services stocks that are worth considering include Quintiles Transnational Holdings Inc. ( Q ), ICON Public Limited Company ( ICLR ) and Omnicare Inc. ( OCR ). While Quintiles Transnational sports a Zacks Rank #1 (Strong Buy), both ICON Public and Omnicare carry a Zacks Rank #2 (Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: OCR , Q , PRXL , ICLR

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