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PerkinElmer (PKI) Q3 Earnings Beat Estimates, Revenues Miss

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PerkinElmer, Inc. (PKI - Free Report) reported third-quarter 2019 adjusted earnings per share (EPS) of $1.06, which beat the Zacks Consensus Estimate of $1.01 per share by 4.9%. Moreover, the bottom line improved 17.8% from the year-ago quarter.

Based in Waltham, MA, this leading MedTech company reported revenues of $706.9 million, up 4.8% from the year-ago quarter and improved 5% organically. Adjusted revenues in the reported quarter came in at $707.1 million, up 4.8% year over year. However, the top line lagged the Zacks Consensus Estimate of $$722.5 million by 2.2%.

Segment Details

DAS

At this segment, revenues totaled $426.9 million, reflecting an improvement of 5.1% from the year-ago quarter. Organically, the segment grew 4% in the quarter under review. Per management, the third-quarter performance was affected by soft performance in applied markets. However, solid show by life sciences contributed to organic revenues.

Coming to profits at the DAS segment, the company reported third-quarter 2019 adjusted operating income of $86.2 million, up 26.8% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $280 million, up 4.4% on a year-over-year basis. Adjusted revenues in the segment totaled $280.2 million, up 4.4% from the prior-year quarter. Organically, the segment improved 6% in the third quarter. Per management, the upside can be attributed to strength across reproductive health and immunodiagnostics business lines.

Adjusted operating income in the segment totaled $79.7 million, up 4.6% from the year-ago quarter.

Geographical Details

Per management, the major geographies witnessed a mixed third 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.

PerkinElmer, Inc. Price, Consensus and EPS Surprise

 

PerkinElmer, Inc. Price, Consensus and EPS Surprise

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

Margin Analysis

Gross profit in the quarter came in at $342.3 million, up 3% year over year. Adjusted gross margin, as a percentage of revenues, was 51.7%, up 70 bps year over year.

Adjusted operating income was $152.5 million, up 18.6% year over year.
Adjusted operating margin, as a percentage of revenues, was 21.6% in the quarter, up 250 bps.

Financial Update

In the third quarter, cash and cash equivalents came in at $392.9 million, which increased a whopping 161.9% sequentially.

During the reported quarter, net cash provided by operating activities came in at $106.7 million, up 14.5% from the year-ago quarter.

2019 Guidance Raised

PerkinElmer now expects 2019 adjusted EPS of $4.07.

Acquisition Update

The company announced the buyout of Meizheng Group – a leading food safety testing company in China. The buyout is likely to strengthen PerkinElmer’s food safety abilities in attractive markets, which includes pathogen, toxin and drug residue testing. Further, the acquisition is likely to bolster PerkinElmer’s assay capabilities.

Conclusion

PerkinElmer exited the third quarter on a mixed note, with EPS surpassing the consensus mark, while revenues missing the same. The company witnessed strong performances by its core Discover & Analytics Solutions and Diagnostics units in the quarter under review. Strength in reproductive health and immunodiagnostics business lines led to the impressive performance. 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 #3 (Hold).

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks which reported solid results this earning season are Edwards Lifesciences (EW - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and ResMed Inc. (RMD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Third-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.

ResMed reported third-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

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