PerkinElmer Beats but Q2 Earnings Fall - Analyst Blog

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PerkinElmer, Inc. ( PKI ) posted adjusted earnings per share (EPS) of 51 cents in the second quarter of 2013, beating the Zacks Consensus Estimate of 48 cents. However, the top line lagged the year-ago earnings of 53 cents by nearly 4%. Reported EPS fell 17.2% to 24 cents from 29 cents a year ago, mainly due to significant rise in restructuring and contract termination charges.

Revenues in the quarter rose 4.1% to $543.3 million, exceeding the Zacks Consensus Estimate of $534 million. The increase was driven by improvements in PKI's both operating segments.

Adjusted operating income for the quarter declined 5.0% to $85.2 million from $89.7 million a year ago. Adjusted operating margin fell 130 basis points (bps) to 15.6% from 16.9% in the second quarter of 2012.

Segment Results

Revenues from the Human Health segment went up 4.2% to $300.0 million while organic revenues increased 2%. However, adjusted operating income fell 3.3% to $64.4 million compared with $66.6 million in the same quarter a year ago. Adjusted operating margin declined 110 bps to 21.2% in the quarter.

Revenues from Environmental Health rose 4.0% to $243.4 million with a 3% increase in organic revenues. Operating income dipped 34.1% to $19.3 million from $29.3 million in the second quarter of 2012. Adjusted operating margin ebbed 160 bps to 12.5% compared with the year-ago level.

Financial Position

PerkinElmer had cash and cash equivalents of $112.5 million as of Jun 30, 2013, down from $171.4 million as of Dec 31, 2012. Total debt rose to $1.0 billion as of Jun 30, 2013 compared with $940.6 million as of Dec 31, 2012.

In the first six months of 2013, cash flow from operating activities fell significantly by 58.2% to $38.7 million from $92.7 million in the same period of 2012, mainly driven by higher inventories. Capital expenditure (adjusted) almost doubled to $22.9 million compared with $11.4 million a year ago.

2013 Outlook

PerkinElmer expects organic revenues to increase in the low-single digit range in the year compared with 2012. PKI also expects reported earnings per share in the range of $1.40 to $1.47 and adjusted earnings per share between $2.03 and $2.10 compared with the prior guidance of $2.00 to $2.10.

Our Take

PerkinElmer, Inc. is a global technology company which provides products and systems to the telecom, medical, pharmaceutical, chemical, semiconductor and photographic markets. PKI has operations in over 100 countries, and is a component of the S&P 500 Index. Currently, it retains a Zacks Rank #4 (Sell).

Other stocks that are performing well in the medical instruments industry include Hanger, Inc. ( HGR ), LeMaitre Vascular, Inc. ( LMAT ), and Measurement Specialties Inc. ( MEAS ). Hanger and LeMaitre Vascular are Zacks Rank #1 (Strong Buy) stocks while Measurement Specialties retains a Zacks Rank #2 (Buy).



HANGER ORTHOPED (HGR): Free Stock Analysis Report

LEMAITRE VASCLR (LMAT): Free Stock Analysis Report

MEASUREMNT SPCL (MEAS): Free Stock Analysis Report

PERKINELMER INC (PKI): Free Stock Analysis Report

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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 , Earnings , Stocks

Referenced Stocks: EPS , HGR , LMAT , MEAS , PKI

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