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Why Is PerkinElmer (PKI) Down 7% 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 7% 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 drivers.

PerkinElmer Q1 Earnings and Revenues Surpass Estimates

PerkinElmer, Inc. reported first-quarter 2022 adjusted earnings per share (EPS) of $2.41, which beat the Zacks Consensus Estimate of $2.08 per share by 15.9%. The bottom line, however, declined 35.2% from the year-ago quarter.

GAAP EPS in the quarter was $1.40 compared with the year-ago quarter's figure of $3.37.

Revenue Details

Based in Waltham, MA, this leading MedTech company reported revenues of $1.26 billion, down 3.8% from the year-ago quarter and 11% organically. Nonetheless, the top line surpassed the Zacks Consensus Estimate by 6.7%.

Segment Details

Discover & Analytics Solutions

At this segment, revenues were $602 million, reflecting a rise of 33% from the year-ago quarter. Organically, the segment witnessed an increase of 12%.
Coming to profits at the DAS segment, the company reported first-quarter 2022 adjusted operating income of $127 million, up 67.1% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $657 million, down 23% on a year-over-year basis. Organically, the segment decreased 24% in the first quarter.
Adjusted operating income in the segment totaled $301 million, down 37.7% from the year-ago quarter.

Margin Analysis

Adjusted gross profit in the quarter amounted to $738.2 million, down 8.8% year over year. Adjusted gross margin, as a percentage of revenues, was 58.6%, down 330 basis points (bps) year over year.

Selling, general and administrative expenses were $334.4 million, up 33% on a year-over-year basis. Research and development expenses amounted to $76.6 million, up 27.2% from the year-ago quarter.

Adjusted operating income was $409.8 million, which declined 24.4% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues, was 32.5%, down 890 bps.

Financial Update

The company exited the first quarter with cash and cash equivalents of $669.8 million compared with $618.3 million a year ago.

Net cash provided by operating activities in the first quarter totaled $283.2 million compared with $473.5 million in the year-ago quarter.

2022 Guidance

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

For second-quarter 2022, the company projects adjusted EPS in the range of $2.00 to $2.05. The Zacks Consensus Estimate is pegged at $1.67 per share. For the same period, revenues are anticipated to be $1.20-$1.22 billion. The Zacks Consensus Estimate for the same stands at $1.08 billion.

For 2022, the company expects adjusted EPS in the range of $7.15 to $7.45. The Zacks Consensus Estimate is pegged at $6.92 per share.

Revenues are anticipated between $4.56 billion and $4.63 billion. The consensus mark stands at $4.47 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 22.44% due to these changes.

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 top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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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