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PerkinElmer (PKI) Up 7.1% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for PerkinElmer (PKI - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PerkinElmer due for a pullback? 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 drivers.

PerkinElmer Q2 Earnings and Revenues Surpass Estimates

PerkinElmer, Inc. reported second-quarter 2021 adjusted earnings per share of $2.83, which beat the Zacks Consensus Estimate of $2.41 per share by 17.4%. The bottom line improved 80.2% from the year-ago quarter.

GAAP earnings per share in the quarter was $2.19, compared with the year-ago quarter’s figure of $1.23.

Revenue Details

Based in Waltham, MA, this leading MedTech company reported revenues of $1.23 billion, up 51.3% from the year-ago quarter and 41% organically. Adjusted revenues in the reported quarter were $1.23 billion, up 51.4% year over year. The top line surpassed the Zacks Consensus Estimate by 9.8%.

Segment Details

Discover & Analytics Solutions

At this segment, revenues were $513 million, reflecting a rise of 31.2% from the year-ago quarter. Organically, the segment saw an increase of 22% in the quarter under review.

Coming to profits at the DAS segment, the company reported second-quarter 2021 adjusted operating income of $101 million, up 77.2% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $716 million, up 70.1% on a year-over-year basis. Organically, the segment increased 59% in the second quarter.

Adjusted operating income in the segment totaled $328 million, compared with $190 million in the year-ago quarter.

Margin Analysis

Adjusted gross profit in the quarter amounted to $711.2 million, up 53.3% year over year. Adjusted gross margin, as a percentage of revenues was 57.8%, up 70 basis points (bps) year over year.

Selling, general and administrative expenses were $281.8 million, up 27.5% on a year-over-year basis. Research and development expenses amounted to $65.8 million, up 32.9% from the year-ago quarter.

Adjusted operating income was $411.3 million, which soared 80.2% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues was 33.5%, up 540 bps.

Financial Update

The company exited the first quarter with cash and cash equivalents of $572.8 million, compared with $988.2 million in the prior quarter.

Cumulative net cash provided by operating activities for the second quarter totaled $761.4 million, compared with $198.5 million in the year-ago period.

2021 Guidance

PerkinElmer has provided guidance for third-quarter 2021 and raised full-year 2021 outlook.

For third-quarter 2021, the company projects adjusted EPS of $1.62. The Zacks Consensus Estimate is pegged at $1.70 per share. For the same period, revenues are anticipated to be around $1 billion. The Zacks Consensus Estimate for the same stands at $951.6 million.

For 2021, the company expects adjusted EPS to be $9.88 (up from the previous estimate of at least $9.40). The Zacks Consensus Estimate is pegged at $9.50 per share.

Revenues are anticipated to be $4.57 billion (up from the prior estimate of at least $4.37 billion). The consensus mark stands at $4.37 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

At this time, PerkinElmer has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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