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PerkinElmer Q4 Revenues Up 13 Percent

NEW YORK (GenomeWeb) – PerkinElmer reported after the close of the market on Thursday that its fourth quarter revenues rose 13 percent year over year, led by 23 percent growth in its diagnostics business.

For the three months ended Dec. 31, 2017, the firm reported revenues of $641.6 million, up from $566.8 million a year earlier, and beating the analysts' average estimate of $618.6 million. Excluding revenues from its acquisition of European autoimmune and allergy diagnostics firm Euroimmun, PerkinElmer said organic Q4 revenues rose 6 percent.

"It was a strong finish to a very good year as we not only delivered solid financial results but also made meaningful strategic moves that have improved the growth and competitive strength of our businesses," PerkinElmer Chairman and CEO Robert Friel said in a statement. "With the completion of the Euroimmun transaction, we enter 2018 with an improved portfolio, wider reach, and a more capable organization, thereby increasing the positive impact we have on global health while continuing to create value for our shareholders."

Q4 revenues in the firm's diagnostics business rose 23 percent to $193.4 million from $156.8 million in Q4 2016. Excluding Euroimmun, diagnostics revenues increased 6 percent. Q4 revenues in the discovery and analytical solutions business rose 9 percent to $448.2 million from $409.9 million in the year-ago period. Organic revenues increased nearly 7 percent.

On a conference call with analysts following the release of the earnings, Friel noted the Euroimmun acquisition contributed $13 million to Q4 revenue, but that the operating income generated by Euroimmun during this period was offset by an increase in incentive compensation related to the closing of the transaction.

He also said some of the company's recent moves in diagnostics have expanded its reach and capabilities. "The sale of our medical imaging business and the acquisition of Euroimmun have… expanded our technical capabilities and positioned us in more attractive markets," he said. "We couldn't be more enthusiastic about our combined future with Euroimmun, which adds autoimmune and allergy testing to our portfolio, as well as additional infectious disease testing capabilities."

Friel further noted that PerkinElmer's acquisition of Indian diagnostics firm Tulip Diagnostics has helped the company expand its reach in emerging markets like China and India, and added that PerkinElmer has a "significant opportunity" to grow even more in these countries as they begin to invest in healthcare for their growing populations.

"In reproductive health during 2017, we increased our screening menu, launched the QSight — our triple quad mass spec instrument — expanded in the newborn confirmatory testing through the establishment of our genetic testing business, and we will soon be entering the noninvasive prenatal screening market with our Vanadis offering," he added.

CFO Andy Wilson added that the key drivers for the diagnostics business in Q4 were newborn and prenatal screening, mainly in Europe and Asia. He also noted that revenues from Tulip grew in the double digits in Q4, driven by rapid tests for communicable diseases.

In the discovery and analytical solutions business, Q4 results were driven by demand for PerkinElmer's environmental and food testing products, as well as pharma and biotech product and services, Wilson said. Industry organic revenues grew in the low single digits, and revenues from the academic end market declined in the low single digits.

The firm reported a net loss of $41.1 million, or $.37 per share, for the recently completed quarter, compared to net income of $64.8 million, or $.59 per share, in Q4 2016. On an adjusted basis, PerkinElmer reported Q4 2017 earnings of $.97 per share, beating the analysts' average estimate of $.94 per share.

PerkinElmer's Q4 2017 R&D expenses rose about 16 percent to $37.7 million from $32.9 million a year earlier, while its SG&A costs for the quarter rose 6 percent to $172.3 million from $162.8 million.

For the full year 2017, the firm reported total revenues rose 7 percent to $2.26 billion from $2.12 billion in 2016, beating the analysts' average estimate of $2.23 billion.

2017 revenues in the firm's diagnostics business rose 13 percent to $678.5 million from $602.5 million in 2016. Excluding Euroimmun, diagnostics revenues increased 5 percent. 2017 revenues in the discovery and analytical solutions business rose almost 5 percent to $1.58 billion from $1.51 billion in the year-ago period. Organic revenues increased 4 percent.

The firm's 2017 income rose to $292.6 million, or $2.64 per share, from $234.3 million, or $2.12 per share, in 2016. On an adjusted basis, PerkinElmer reported EPS of $2.90, beating the analysts' average estimate of $2.89.

R&D expenses for the year rose 12 percent to $139.4 million from $124.3 million in 2016, and the firm's SG&A costs for 2017 rose 3 percent to $616.2 million from $600.9 million.

The firm ended the year with $202.1 million in cash and cash equivalents.

For the full year 2018, the company expects earnings per share of $2.28 and adjusted earnings per share of $3.50. Analysts are expecting earnings of $3.47 per share for 2018. On the conference call, Friel said the company expects full-year revenues of $2.72 billion to $2.74 billion, with the firm's base business growing 4 percent to 5 percent organically, and Euroimmun revenues of approximately $360 million, which would represent growth of 13 percent to 15 percent. Analysts are expecting 2018 revenues of $2.7 billion.

PerkinElmer's shares are trading down less than 1 percent at $82.20 in Friday morning trading on the New York Stock Exchange.