We maintain our Neutral rating on
) based on its first quarter results and lack of direction. Its
first quarter earnings per share of 43 cents surpassed the Zacks
Consensus Estimate of 41 cents.
Net income from continuing operations was $22.1 million, or 19
cents per share, in the first quarter versus net income of $27.3
million, or 24 cents per share in the prior-year quarter. The
results for the reported quarter include non-cash expenses
pertaining to takeovers in 2011.
Revenues from continuing operations stood at $510.9 million in
the reported quarter, up 14% year over year, beating the Zacks
Consensus Estimate of $509 million.
PerkinElmer projects reported earnings per share in a band of
$1.27 to $1.32 (earlier $1.22 to $1.28). The company expects
adjusted earnings per share of about $2 to $2.05 (earlier $1.98 to
$2.04). PerkinElmer reiterated its guidance for organic revenue to
increase in the mid-single digits.
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 must make large investments in
R&D in order to retain a competitive pipeline. PerkinElmer
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. We currently have a Neutral recommendation on PerkinElmer.
The stock currently retains a Zacks #2 Rank, which translates into
a short-term Buy recommendation.
PERKINELMER INC (PKI): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis Report
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