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PerkinElmer (PKI) Q4 Earnings and Revenues Beat Estimates

Zacks Equity Research

PerkinElmer, Inc. PKI reported fourth-quarter 2019 adjusted earnings per share (EPS) of $1.35, which beat the Zacks Consensus Estimate of $1.32 per share by 2.3%. Further, the bottom line improved 14.4% from the year-ago quarter.

Based in Waltham, MA, this leading MedTech company reported revenues of $805.5 million, up 6.5% from the year-ago quarter and improved 5% organically. Adjusted revenues in the reported quarter came in at $805.7 million, up 6.5% year over year. The top line also outpaced the Zacks Consensus Estimate by 0.4%.

2019 at a Glance

In 2019, the company reported revenues worth $2.88 billion, which met the Zacks Consensus Estimate. On a year-over-year basis, the top line improved 3.6%.

Adjusted EPS for the year was $4.10, which beat the Zacks Consensus Estimate by 0.5%. EPS also climbed 13.6% year over year.

PerkinElmer reports through two major segments — Discovery & Analytical Solutions (DAS) and Diagnostics.

In 2019, DAS revenues totaled $1.75 billion (61% of net revenues) and Diagnostics’ revenues came in at $1.14 billion (39%).

PerkinElmer, Inc. Price, Consensus and EPS Surprise

 

PerkinElmer, Inc. Price, Consensus and EPS Surprise
PerkinElmer, Inc. Price, Consensus and EPS Surprise

PerkinElmer, Inc. price-consensus-eps-surprise-chart | PerkinElmer, Inc. Quote

Segment Details

DAS

At this segment, revenues totaled $496.5 million, reflecting an improvement of 7.9% from the year-ago quarter. Organically, the segment grew 5% in the quarter under review. Per management, continued strength in life sciences and a rebound in the core food business contributed to organic revenues.

Coming to profits at the DAS segment, the company reported fourth-quarter 2019 adjusted operating income of $116 million, up 25.1% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $309 million, up 4.2% on a year-over-year basis. Adjusted revenues in the segment totaled $309.2 million, up 4.2% from the prior-year quarter. Organically, the segment improved 5% in the fourth quarter. Per management, the upside can be attributed to strength across reproductive health and immunodiagnostics business lines.

Adjusted operating income in the segment totaled $90.6 million, up 5.6% from the year-ago quarter.

Geographical Details

Per management, the major geographies witnessed a mixed fourth quarter, with low-single digit organic revenue growth in the United States and mid-single digit organic revenue growth in Asia Pacific (APAC) and Europe.

Margin Analysis

Gross profit in the quarter came in at $398.2 million, up 5.8% year over year. Adjusted gross margin, as a percentage of revenues was 52.4%, up 100 bps year over year.

Adjusted operating income was $192.3 million, up 17% year over year. Adjusted operating margin, as a percentage of revenues was 23.9%, up 220 bps.

Financial Update

In the fourth quarter, cash and cash equivalents came in at $191.9 million, increasing 17.6% from the prior-year quarter.

During the reported quarter, net cash provided by operating activities came in at $215.2 million, up 34.9% from the year-ago quarter.

2020 Guidance

PerkinElmer estimates adjusted earnings per share between $4.50 and $4.60. Moreover, revenues are anticipated to be in the range of $3.05-$3.09 billion.

For the first-quarter 2020, the company anticipates adjusted earnings per share of 70 cents. Revenues are expected to total $700 million.

Conclusion

PerkinElmer exited the fourth quarter on a strong note, with both earnings and revenues surpassing their respective consensus marks. The company witnessed strong performances by its core Discover & Analytics Solutions and Diagnostics units in the quarter under review. Continued strength in life sciences, strong performance across reproductive health and immunodiagnostics business lines led to the impressive results. Modest growth in international markets is also encouraging.

Further, expansion in operating margins buoys optimism. Solid show by Tulip and EUROIMMUN also paints a bright picture.

However, negative currency movements impacted the company’s top line in the quarter under review. Furthermore, PerkinElmer continues to make acquisitions, which increases integration risks.

Zacks Rank

Currently, PerkinElmer carries a Zacks Rank #2 (Buy).

Other Key Picks

Some other top-ranked stocks in the broader medical space are SeaSpine Holdings Corporation SPNE, STERIS plc STE and DexCom, Inc. DXCM, all three carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The Zacks Consensus Estimate for SeaSpine’s fourth-quarter 2019 revenues is pegged at $43.6 million, suggesting growth of 14.7% from the prior-year reported figure. The same for loss per share is anticipated at 44 cents, indicating an improvement of 16.9% from the year-ago reported figure.

The Zacks Consensus Estimate for STERIS’s third-quarter fiscal 2020 revenues is pegged at $749.7 million, indicating an improvement of 7.7% from the year-earlier reported figure. The same for adjusted earnings per share stands at $1.43, indicating growth of 13.5% from the year-ago reported figure.

The Zacks Consensus Estimate for DexCom’s fourth-quarter 2019 revenues is pegged at $457 million, suggesting growth of 35.2% from the prior-year reported figure. The same for adjusted earnings per share stands at 72 cents, indicating an improvement 33.3% from the prior-year reported figure.

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PerkinElmer, Inc. (PKI) : Free Stock Analysis Report
 
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