UPDATE 3-PerkinElmer profit tops Street, raises FY forecast

Thu Aug 5, 2010 5:28pm EDT

* Q2 adjusted EPS $0.38 versus Street view $0.33

* Revenue up 14 percent to $497.8 million

* Sees adjusted 2010 EPS $1.49 to $1.54

* Shares rise 5 percent (Adds analyst comment, share movement)

By Bill Berkrot

NEW YORK, Aug 5 (Reuters) - PerkinElmer Inc (PKI.N) reported better-than-expected second-quarter profit on Thursday, helped by a double-digit jump in environmental health sales, and the scientific instruments maker raised its full-year forecast above Wall Street estimates.

PerkinElmer shares rose 5 percent in light after-hours trade.

With its third successive quarter of increased profit following three down quarters during the recession, the company appears to have turned a corner.

"That's our conclusion and that's why we took our guidance up in the back half," Chief Executive Robert Friel said in a telephone interview.

"We do not share the view that we're looking at a double dip (recession). We're continuing to see the trends we've seen in the second quarter and that's what gives us the confidence to take the guidance up," Friel said, adding that he expects "high single digit growth and continued strong earnings expansion."

PerkinElmer raised its adjusted full-year earnings forecast to $1.49 to $1.54 per share from its prior view of $1.43 to $1.48 per share. Analysts are looking for $1.46 for the year.

"It was an excellent quarter across the board. They put up high quality numbers and obviously the guidance is a reflection of confidence in the outlook," said Deutsche Bank analyst Ross Muken, who expects PerkinElmer shares to rise 5 percent to 10 percent on Friday.

Net profit rose to $57.6 million, or 49 cents per share, from $21.5 million, or 18 cents per share, a year ago.

Excluding items Waltham, Massachusetts-based PerkinElmer earned 38 cents per share, topping analysts' average expectations by 5 cents, according to Thomson Reuters I/B/E/S.

Revenue for the quarter climbed 14 percent to $497.8 million, also exceeding Wall Street estimates of $464.7 million.

"It's a very good quarter; solid revenue beat and solid EPS beat, and more importantly what they highlighted was broad based strength," said Quintin Lai, an analyst for Robert W Baird & Co.

"It looks like a lot of confidence coming from the management team here," Lai added.

Sales in the Environmental Health division jumped 18.5 percent in the quarter to $300.4 million.

"Obviously, the big highlight was the big snapback in the environmental health business where I would think both the industrial and safety and security in environmental were up substantially from the prior year, and on a sequential basis," Muken said.

Friel said the businesses that were hit particularly hard last year were bouncing back.

"A lot of the environment businesses fell into that category. They're getting the benefit of the recovery in the market as well as easy comparisons," Friel said.

Sales in Human Health rose 6.8 percent to $197.5 million, helped by a rebound in medical imaging sales as hospitals spend money to convert from film to digital imaging equipment.

Friel said PerkinElmer would continue to make small acquisitions of companies with interesting and complementary technologies, and he is also looking to further expand geographically.

"Clearly in China and Asia and the emerging areas, we're seeing good growth," he said.

PerkinElmer shares rose to $21.09 in extended trading from their New York Stock Exchange close at $20.05 (Reporting by Bill Berkrot; editing by Bernard Orr)

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