) reported third quarter 2012 adjusted (excluding one-time
expenses) earnings per share of 45 cents, beating the
corresponding Zacks Consensus Estimate by a penny.
PERKINELMER INC (PKI): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis
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Net income from continuing operations was approximately $29
million in the quarter (or 25 cents per share), up 3.5% year over
year. Net income was $29.6 million, down 19.1% on a
Revenues improved 12.5% year over year to $509.6 million in the
reported quarter and surpassed the Zacks Consensus Estimate of
Revenues grew 6% year over year on an organic basis after
adjustment for acquisitions which contributed 8% to the growth in
revenues in the quarter and a 3% drop accounting for negative
impact of foreign currency fluctuation.
Human Health segment revenues were $257.2 million, up 24.5% (up
10% on an organic basis) year over year. Revenues from the
Environmental Health segment amounted to $252.4 million in the
quarter, up 2.5% (up 3% on an organic basis).
Adjusted gross margin was 48.3% in the third quarter, up
marginally 10 basis points year over year. Adjusted operating
margin was 15.2%, up 60 basis points on a year-over-year basis.
Adjusted operating margin at the Human Health segment was 21.8%
in the quarter, up 180 basis points year over year. Adjusted
operating margin at the Environmental Health segment was 12.3%,
down 30 basis points from the year-ago quarter.
Adjusted selling, general and administrative expenditure (as a
percentage of revenues) came in at 26.8% compared with 27.2% in
the prior year quarter while adjusted research and development
expenses were 6.3% compared with 6.5% in the year-ago quarter.
PerkinElmer exited the third quarter with cash and cash
equivalents of $170.8 million, down 31.1 % year over year.
Long-term debt increased six fold to $930.9 million. Cash flow
from continuing operations declined almost 25% year over year to
PerkinElmer reaffirmed its guidance for organic revenue growth in
mid-single digits for 2012. The company increased its forecast
for adjusted earnings per share in the range of $2.05 to $2.07
compared with the prior guidance of $2 to $2.05 for 2012.
PerkinElmer narrowed its forecast for reported earnings per share
in a range of $1.22 to $1.24 compared with the prior guidance in
the band of $1.21 to $1.26.
PerkinElmer has established itself as a market leader,
particularly in the genetic screening segment, and holds one of
top two market share positions in several important subsets of
the life sciences technology and genetic screening businesses.
The company continues to execute well across all its product
lines aided by rebounding markets and cost containment efforts.
PerkinElmer's transfer of select manufacturing to China has
expanded its operating margins. The company has increased its
productivity and improved product mix in favor of higher value
added products, resulting in higher operating margins.
PerkinElmer, however, operates in a highly competitive industry
characterized by rapid technological change and evolving industry
standards. As a result, the company would have to make large
investments in R&D in order to retain a competitive pipeline.
PerkinElmer competes with
Thermo Fisher Scientific
) among others.
PerkinElmer's exposure to poor end market visibility might result
in a relatively unattractive risk-reward trade-off for the stock.
However, the company's operations, both sales and manufacturing,
are diversified on a geographic basis. It has emerged as a
higher-growth, higher-margin company vis-à-vis its peers. The
stock carries a short-term Zacks #2 Rank (Buy).