PerkinElmer, Inc. (PKI) posted adjusted earnings per share of 73 cents in the fourth quarter of 2013, surpassing the Zacks Consensus Estimate by 3 cents as well as the year ago level of 65 cents by 12.3%. On a reported basis, PKI posted earnings per share of 58 cents for the quarter in sharp contrast to an adjusted loss of 14 cents in the year-ago quarter.
Revenues in the quarter inched up 3.6% to $593.3 million, exceeding the Zacks Consensus Estimate of $588.0 million. Organic revenues rose 3% in the quarter. On an adjusted basis, total revenue increased 2.9% to $594.0 million in the quarter.
Adjusted gross profit rose 3.3% to $291.2 million while adjusted gross margin increased 20 basis points (bps) to 49.0% in the quarter. Adjusted operating income increased 8.0% to $114.1 million in the quarter from $105.6 million in the fourth quarter of 2012. Adjusted operating profit margin increased 90 bps to 19.2% from 18.3% a year ago.
For full year 2013, adjusted earnings rose marginally (nearly 1.0%) to $2.08 from $2.06 a year ago and edged past the Zacks Consensus Estimate of $2.05. However, reported earnings rose significantly to $1.46 from 60 cents in 2012. Total revenue rose 2.4% to $2,166.2 million while adjusted total revenue grew 1.5% to $2,173.6 million in the year.
Revenues from the Human Health segment went up 5.4% to $336.1 million while organic revenues grew 4% year-over-year. Adjusted operating income rose 8.7% to $83.8 million compared with $77.2 million in the same quarter a year ago. Adjusted operating margin increased 100 bps to 24.9% in the quarter.
Revenues from Environmental Health inched up 1.2% to $257.2 million with a 1% rise in organic revenues. Adjusted operating income escalated nearly 5.0% to $40.8 million from $38.9 million in the fourth quarter of 2012. Adjusted operating margin expanded 60 bps to 15.9% in the quarter.
PerkinElmer had cash and cash equivalents of $173.2 million as of Dec 29, 2013, slightly up from $171.4 million as of Dec 30, 2012. Total debt declined slightly (0.6%) to $934.7 million as of Dec 29, 2013 compared with $940.6 million as of Dec 31, 2012. Consequently, debt-to-capitalization ratio decreased 80 bps to 31.9% from 32.7% a year ago.
In 2013, cash flow from operating activities increased slightly by 2.9% to $158.1 million from $153.6 million in the prior year. Capital expenditure declined 8.1% to $39.0 million compared with $42.4 million a year ago.
For 2014, PerkinElmer expects reported earnings per share in the range of $1.93 to $1.98. On an adjusted basis, PKI expects earnings per share between $2.40 and $2.45 for the year. The current Zacks Consensus Estimate of $2.41 lies within the guided range.
PerkinElmer, Inc. is a global technology company which provides products and systems to the telecom, medical, pharmaceutical, chemical, semiconductor and photographic markets. PKI has operations in over 100 countries, and is a component of the S&P 500 Index.
We are encouraged about PKI’s earnings and revenue beats in the fourth quarter as well as its clear-cut 2014 guidance. Currently, it carries a Zacks Rank #2 (Buy).
Other players in the medical products industry that look attractive at current levels include Newport Corp. (NEWP), NuVasive, Inc. (NUVA), and Baxter International Inc. (BAX). Newport and NuVasive carry a Zacks Rank #1 (Strong Buy) while Baxter International has a Zacks Rank #2 (Buy).
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