PerkinElmer Beats Estimates - Analyst Blog

PerkinElmer (PKI) reported third-quarter 2010 adjusted (excluding one-time expenses) earnings per share of 31 cents, beating the Zacks Consensus Estimate of 29 cents and the year-ago earnings of 27 cents per share. The quarterly results surpassed the company's previously issued guidance in the range of 27 to 29 cents. 

Revenues

Revenue came in at $419.1 million in the reported quarter, up 11% year over year (up 10% on an organic basis) and higher than the Zacks Consensus Estimate of $399 million.  

Segment-wise Revenue

Sales from the Human Health segment were $194.5 million, up 9% (up 5% on an organic basis) year over year.  Revenue from the Environmental Health segment was $224.6 million, up 14% (up 14% on an organic basis).   

Margins

Adjusted gross margin was 47% in the third quarter, slightly lower than 47.3% in the prior-year quarter. Adjusted operating margin was 13.7%, up 110 basis points on a year-over-year basis.   

Adjusted operating margin for the Human Health segment was 19.3%, up marginally by 10 basis points year over year. Adjusted operating margin at the Environmental Health segment was 13.2%, up 230 basis points. 

Balance Sheet

Cash and cash equivalents were $251 million, as of October 3, 2010, up 66.7% year over year. Long-term debt, excluding minor short-term borrowings, was $670.1 million, up 16.2%.

Outlook

The company raised its adjusted earnings per share forecast for fiscal 2010 to a range of $1.29 to $1.31 from $1.24 to $1.29 earlier. 

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. However, growth in these areas will be offset by the company's exposure to more cyclical end markets (non-healthcare end markets constituted about 40% of PerkinElmer's sales).