UPDATE 1-PerkinElmer narrows 2013 forecast, cites Q4 uncertainty

Wed Oct 30, 2013 4:57pm EDT

By Bill Berkrot

Oct 30 (Reuters) - Scientific instruments maker PerkinElmer Inc narrowed its full-year earnings forecast range on Wednesday, lowering the top end by 3 cents, as it takes a cautious view on business for the rest of the year.

The company also reported slightly higher-than-expected third-quarter profit and revenue.

PerkinElmer said it now expects adjusted 2013 earnings of $2.04 to $2.07 per share, tightening its prior view of $2.03 to $2.10 per share.

"As we looked at Q4 we just thought with some of the uncertainty out there it was prudent to be conservative," Chief Executive Robert Friel said of the updated forecast in a telephone interview. "We can still get operating margin expansion and decent EPS growth."

Friel said significant currency devaluation in Southeast Asia and India that makes the cost of PerkinElmer products more expensive in local currency has taken something of a toll.

"In those countries we've seen a little bit of a deceleration of the growth and emerging markets have been a real strength for us, so that's a little bit concerning to us," Friel said. "That's why we're guiding a little bit lower from a revenue perspective in Q4."

The recent U.S. government shutdown could also affect fourth-quarter results even though PerkinElmer does not have much exposure to government business.

"Some of our highly sensitive instruments when they're shipped overseas require the issuance of government export licenses and as a result of the shutdown the government is working through some backlogs, so we're a little concerned that the delay could have an impact of pushing out some of these from Q4 into Q1," he explained.

PerkinElmer, which also sells medical diagnostic equipment and environmental safety monitoring products, posted a net profit from continuing operations of $40.3 million, or 36 cents per share, compared with a profit of $29.6 million, or 25 cents per share a year ago.

Excluding special items, the company had adjusted earnings of 49 cents per share, exceeding analysts' average expectations by a penny, according to Thomson Reuters I/B/E/S.

Revenue for the quarter rose 3 percent to $524.3 million, slightly ahead of Wall Street estimates of $523.8 million.

Business in China and Brazil remained strong, and the company is starting to see signs of renewed growth in developed countries, Friel said.

"Europe for us was down just slightly, but there are some indications that things seem to be potentially improving there and we've seen some decent recovery in the Americas, particularly in the U.S.," he said. "We're starting to see Japan come back as well."

The Environmental Health business saw sales grow 4.3 percent to $231.9 million for the quarter, while the Human Health unit had revenue growth of 1.7 percent to $292.4 million.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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