PerkinElmer (PKI) Down 11.6% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for PerkinElmer (PKI). Shares have lost about 11.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PerkinElmer due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

PerkinElmer (PKI) Q2 Earnings and Revenues Surpass Estimates

PerkinElmer reported second-quarter 2022 adjusted earnings per share (EPS) of $2.32, which beat the Zacks Consensus Estimate of $2.03 per share by 14.3%. The bottom line, however, declined 18% from the year-ago quarter.

GAAP EPS in the quarter was $1.42 compared with the year-ago quarter's figure of $2.19.

Revenue Details

The company reported revenues of $1.23 billion, flat year over year but down 5% organically. However, revenues were up 8% organically after excluding sales of revenue growth from COVID products. The top line surpassed the Zacks Consensus Estimate by 2.5%.

Segment Details

Discover & Analytics Solutions

At this segment, revenues were $661 million, reflecting a rise of 29% from the year-ago quarter. Organically, the segment witnessed an increase of 13%.

Coming to profits at the DAS segment, the company reported second-quarter 2022 adjusted operating income of $178 million, up 76.2% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $569 million, down 20% on a year-over-year basis. Organically, segment revenues decreased 19% in the second quarter.

Adjusted operating income in the segment totaled $245 million, down 25.3% from the year-ago quarter.

Margin Analysis

Adjusted gross profit in the quarter amounted to $724.1 million, up 1.8% year over year. Adjusted gross margin, as a percentage of revenues, was 58.9%, up 110 basis points (bps) year over year.

Selling, general and administrative expenses were $330 million, up 17.1% on a year-over-year basis. Research and development expenses amounted to $73.3 million, up 11.4% from the year-ago quarter.

Adjusted operating income was $401.9 million, which declined 2.3% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues, was 32.7%, down 80 bps.

Financial Update

The company exited the second quarter with cash and cash equivalents of $360.8 million compared with $618.3 million a year ago.

Net cash provided by operating activities in the second quarter totaled $97.5 million compared with $287.9 million in the year-ago quarter.

2022 Guidance

PerkinElmer provided guidance for third-quarter 2022 and raised the full-year 2022 outlook.

For third-quarter 2022, the company projects adjusted EPS in the range of $1.40 to $1.45. The Zacks Consensus Estimate is pegged at $1.33 per share. For the same period, revenues are anticipated to be $1.02-$1.03 billion. The Zacks Consensus Estimate for the same stands at $1.02 billion.

For 2022, the company expects adjusted EPS in the range of $7.80 to $7.90, up from the previous range of $7.15 to $7.45. The Zacks Consensus Estimate is pegged at $7.30 per share.

Revenues are anticipated between $4.6 billion and $4.64 billion, compared to previous guidance range of $4.56 billion to $4.63 billion. The consensus mark stands at $4.59 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 6.75% due to these changes.

VGM Scores

Currently, PerkinElmer has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PerkinElmer has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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