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PerkinElmer, Inc. (PKI - Analyst Report) posted adjusted earnings per share (EPS) of 49 cents in the third quarter of 2013, exceeding the Zacks Consensus Estimate by a penny as well as the year-ago level of 45 cents by 8.9%. Reported figurers are impressive as they depict growth of 44% in EPS to 36 cents from 25 cents a year ago.

Revenues in the quarter inched up 2.9% to $524.3 million and were in line with the Zacks Consensus Estimate. Organic revenues rose 2% in the quarter. Adjusted revenues went up only 2% to $525.1 million while organic revenues grew 2% as well.

Adjusted operating income edged up 4.2% to $81.6 million from $78.3 million in the year-ago quarter. Adjusted operating profit margin increased 30 basis points to 15.5% from 15.2% a year ago.

Segment Results

Revenues from the Human Health segment went up 1.8% to $292.4 million while organic revenues were flat year-over-year. Adjusted operating income rose 4.0% to $65.6 million compared with $63.1 million in the same quarter a year ago. Adjusted operating margin increased 80 bps to 22.4% in the quarter.

Revenues from Environmental Health rose 4.3% to $231.9 million with a 4% increase in organic revenues. Adjusted operating income dipped marginally by 1.6% to $24.5 million from $24.9 million in the third quarter of 2012. Adjusted operating margin ebbed 60 bps to 10.6% compared with the year-ago level.

Financial Position

PerkinElmer had cash and cash equivalents of $132.3 million as of Sep 30, 2013, down from $171.4 million as of Dec 31, 2012. Total debt declined slightly to $935.9 million as of Sep 30, 2013 compared with $940.6 million as of Dec 31, 2012.

In the first nine months of 2013, cash flow from operating activities fell 23.6% to $87.0 million from $113.8 million in the same period of 2012, mainly driven by higher inventories. Adjusted operating cash flow rose 7.7% to $161.8 million from $150.3 million in the first nine months of 2012. Capital expenditure rose 30.0% to $31.6 million compared with $24.4 million a year ago.

2013 Outlook

PerkinElmer continues to expect organic revenue growth in the low-single digit range in the year compared with 2012. PKI narrowed its reported earnings per share guidance to $1.42–$1.45 from the earlier range of $1.40 to $1.47 and adjusted earnings per share to $2.04–$2.07 from $2.03 to $2.10. The current Zacks Consensus Estimate for 2013 is the upper-end of the new guidance.

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. Currently, it retains a Zacks Rank #3 (Hold).

While we remain on the sidelines about PKI, stock that is performing well in the scientific instruments industry include Mettler-Toledo International Inc. (MTD - Snapshot Report) with a Zacks Rank #2 (Buy). Due to lack of any other favorable stocks, we consider CryoLife, Inc. (CRY - Snapshot Report) and Natus Medical Inc. (BABY - Snapshot Report) from the medical instruments industry as worth to look for. Both of them carry a Zacks Rank #1 (Strong Buy).

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