U.S. Markets closed

PerkinElmer Beats on Q4 Earnings and Revs

Zacks Equity Research

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.

Segment Results

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.
Financial Position

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.

2014 Guidance

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.

Our Take

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).

Read the Full Research Report on BAX
Read the Full Research Report on PKI
Read the Full Research Report on NEWP
Read the Full Research Report on NUVA

Zacks Investment Research