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Why Is PerkinElmer (PKI) Down 9.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for PerkinElmer (PKI - Free Report) . Shares have lost about 9.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.

PerkinElmer Q4 Earnings and Revenues Surpass Estimates

PerkinElmer, Inc. reported fourth-quarter 2020 adjusted earnings per share of $3.96, which beat the Zacks Consensus Estimate of $3.61 per share by 9.7%. Moreover, the bottom line improved 193.3% from the year-ago quarter.

For the full-year 2020, the company reported adjusted EPS of $8.30, up 102.4% from that of 2019. Also, the figure outpaced the consensus mark by 4.5%.

Revenue Details

Based in Waltham, MA, this leading MedTech company reported revenues of $1.36 billion, up 68% from the year-ago quarter and 65% organically. Adjusted revenues in the reported quarter were $1.36 billion, up 68.2% year over year. The top line also surpassed the Zacks Consensus Estimate by 7.7%.

For the full-year 2020, the company delivered adjusted revenues of $3.78 billion, up 31.2% from that of 2019. The figure outpaced the Zacks Consensus Estimate by 3.3%.

Segment Details

Discover & Analytics Solutions

At this segment, revenues were $503 million, reflecting a rise of 1.4% from the year-ago quarter. Organically, the segment saw a decrease of 2% in the quarter under review. Per management, continued strength in life sciences was more than offset by weak performance in food and applied markets.

Coming to profits at the DAS segment, the company reported fourth-quarter 2020 adjusted operating income of $92 million, down 20.7% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $852 million, up 175.7% on a year-over-year basis. Organically, the segment soared 172% in the fourth quarter. Per management, strength in immunodiagnostics and applied genomics business drove the upside and more than offset the improving yet modest ongoing declines across reproductive health business line.

Adjusted operating income in the segment totaled $502 million, compared with $91 million in the year-ago quarter.

Geographical Details

Per management, the major geographies witnessed a solid fourth quarter with Europe exhibiting triple-digit growth, while the United States is witnessing strong double-digit growth. China saw sequential improvement in the quarter under review.

Margin Analysis

Adjusted gross profit in the quarter amounted to $853 million, up 101.9% year over year. Adjusted gross margin, as a percentage of revenues was 62.9%, up 1050 basis points (bps) year over year.

Adjusted operating income was $571.2 million, which skyrocketed 197% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues was 42.2%, up 1830 bps.

Financial Update

The company exited the fourth quarter with cash and cash equivalents of $402 million, compared with $258.3 million in the prior quarter.

During the reported quarter, net cash provided by operating activities amounted to $482.1 million, compared with $215.2 million in the year-ago period.

2021 Guidance

PerkinElmer has provided guidance for first-quarter and full-year 2021.
For first-quarter 2021, the company projects adjusted EPS of at least $3. The Zacks Consensus Estimate is pegged at $2.64 per share.

For 2021, the company expects adjusted EPS to be at least $8.50. The Zacks Consensus Estimate is pegged at $8.33 per share.

Revenues are anticipated to be at least $4.08 billion. The consensus mark is pegged at $4.09 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 15.44% due to these changes.

VGM Scores

At this time, PerkinElmer has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Outlook

Estimates have been 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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