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PerkinElmer Q3 Revenues Increase 8 Percent

NEW YORK (GenomeWeb) – PerkinElmer reported after the close of the market on Thursday that its third quarter revenues rose 8 percent year over year, thanks largely to a 13 percent increase in reported revenues from its diagnostics business.

For the three months ended Oct. 1, the firm reported total revenues of $554.3 million, up from $514.5 million a year earlier, beating Wall Street analyst expectations for revenues of $552.4 million.

Revenues for the firm's discovery and analytical solutions (DAS) business rose 6 percent to $385.4 million from $365.1 million in Q3 2016. Organic revenues increased 4 percent. Revenues for the diagnostics business rose 13 percent to $168.9 million from $149.4 million. Organic revenues for the unit increased 5 percent.

"We continued to drive solid execution across all of our strategic growth initiatives during the third quarter, while also delivering strong near term financial results," PerkinElmer Chairman and CEO Robert Friel said in a statement. "As a result, we remain confident in our improving growth trajectory as these initiatives should enhance our revenue growth in 2018 and beyond."

On a conference call with analysts following the release of the earnings, Friel said the company saw positive organic growth in every region of the world and every end market for the first Q3 in five years. Sales to pharma customers and diagnostics sales were both up in the mid-single digits; environmental, industrial, and academic end markets were all up in the low-single digits; food markets were up more than 20 percent; and growth in emerging markets outpaced growth in developed markets, Friel added.

He also noted that PerkinElmer has made "good progress" strengthening the core areas of its diagnostics business. In Q3, the firm launched its new QSight Triple Quad LC/MS/MS instrument for the clinical market. QSight has been registered as a Class I instrument with the US Food and Drug Administration, and has received CE marking in Europe, Friel said. The company is now working to extend existing assays and develop new ones for the instrument.

Friel also said PerkinElmer is working to extend its offerings in India through Tulip Diagnostics, the Indian IVD firm it acquired in January. PerkinElmer is currently focused on tests for malaria, HIV, and hepatitis for the Indian market.

In the prenatal screening business, PerkinElmer is working to demonstrate the performance of its Vanadis platform, a non-invasive prenatal testing solution based on digital analysis of cell-free DNA that the firm acquired through its January 2016 acquisition of Swedish firm Vanadis Diagnostics. Friel said one Vanadis instrument has been placed in Europe and another will be placed shortly. The company is continuing to validate the platform, and it continues to perform favorably compared to NGS-based NIPT testing, Friel noted.

He also said PerkinElmer has launched whole-genome sequencing services and has signed contracts with academic institutions and pharmaceutical companies for testing. This business is targeted at PerkinElmer's reproductive health customers for newborn screening and Viacord cord blood and tissue banking; to PerkinElmer's partnership with In-Depth Genomics to provide WGS to patients with neurological conditions; and to pharmaceutical customers that come to PerkinElmer for WGS testing to identify potential patients for clinical studies for orphan drugs. The business is in its early days but getting good feedback, Friel said.

PerkinElmer's Q3 net income grew to $91.1 million, or $.82 per share, from $58.1 million, or $.53 per share, in the year-ago period. On an adjusted basis, the firm reported EPS of $.73, beating Wall Street expectations for income of $.72 per share.

The company's Q3 R&D expenses rose 18 percent to $34.9 million from $29.5 million in Q3 2016, and its SG&A costs increased 6 percent to $150.9 million from $142.6 million.

PerkinElmer ended the quarter with $709.5 million in cash and cash equivalents.

For full-year 2017, the company has raised its guidance for earnings per share to a range of $2.55 to $2.57 from a previous guidance range of $2.23 to $2.31. On an adjusted basis, the firm is now expecting EPS of $2.87 to $2.89, compared to a previous adjusted EPS guidance of $2.84 to $2.92. Analysts are expecting EPS of $2.88 for the year. On the conference call, CFO Frank Wilson noted that the firm is expecting adjusted EPS of $.93 to $.95 for the fourth quarter. Analysts are expecting Q4 EPS of $.94.

Friel also noted that the company is making progress toward closing its acquisition of EuroImmun, and expects to finish the deal in Q4.