On Feb 7, we retained
) at Neutral after the company met Zacks Consensus Estimate for
earnings but missed revenue estimate for fourth quarter 2012.
Why the Retention?
PerkinElmer released its results for the fourth quarter 2012
on Jan 31. The company posted adjusted earnings of 65 cents per
share, meeting the Zacks Consensus Estimate and surpassing the
year-ago earnings of 62 cents a share. Revenues in the reported
quarter increased 6.2% year over year to $572.9 million, missing
the Zacks Consensus Estimate of $580 million.
Over the past 30 days, the Zacks Consensus Estimate for 2013
has moved down by a penny to $2.30 while the same for 2014 has
dropped by 3 cents to $2.58 during the same timeframe.
The company forecasts adjusted earnings per share for 2013 in
the range of $2.24 to $2.32. Reported earnings per share from
continuing operations are forecast in the range of $1.57 to
$1.65. Organic revenue is expected to increase in the mid-single
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
The company continues to execute well across several 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 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
Other Stocks to Consider
We currently have a Zacks Rank #3 (Hold) on PerkinElmer.
Mettler-Toledo International Inc.
Becton Dickinson and Company
) carry Zacks Rank #2 (Buy). Both stocks are expected to do
BECTON DICKINSO (BDX): Free Stock Analysis
METTLER-TOLEDO (MTD): Free Stock Analysis
PERKINELMER INC (PKI): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis
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