We maintain our Neutral rating on
) based on its second quarter results. Adjusted earnings per share
of 53 cents surpassed the Zacks Consensus Estimate of 48 cents. Net
income from continuing operations in the reported quarter was $33.6
million (or 29 cents per share), up 12.3% year over year.
Revenues came in at $521.8 million in the reported quarter, up
8.9% year over year, but missed the Zacks Consensus Estimate of
Growth was aided by an extended product portfolio comprising
innovative and improved offerings from PerkinElmer. Revenues grew
5% year over year on an organic basis after adjustment for
acquisitions which contributed 8% to the growth in revenues in the
quarter and a 4% drop after accounting for foreign currency.
Human Health segment revenues were $258.4 million, up 18.1% (up
4% on an organic basis) year over year. Revenues from the
Environmental Health segment amounted to $263.4 million in the
quarter, up 1.2% (up 5% on an organic basis).
For 2012, PerkinElmer reaffirmed its guidance for organic
revenue to increase in the mid-single digits. The company continues
to expect adjusted earnings per share of about $2 to $2.05 for
2012. PerkinElmer revised its forecast for reported earnings per
share in a range of $1.21 to $1.26, compared with the prior
guidance in the band of $1.27 to $1.32.
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 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. Our Neutral recommendation is supported by a short-term
Zacks #3 Rank (Hold).
PERKINELMER INC (PKI): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis Report
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