UPDATE 1-PerkinElmer optimistic about 2014; EPS forecast in line

Thu Jan 30, 2014 5:18pm EST

By Bill Berkrot

Jan 30 (Reuters) - Scientific instruments maker PerkinElmer Inc on Thursday forecast full-year earnings in line with current Wall Street estimates and its CEO sees a rosier 2014 after a year filled with uncertainty in the markets it serves.

The company, which also sells medical diagnostic equipment, such as for prenatal screening, and environmental testing products, sees full-year earnings of $2.40 to $2.45 per share, excluding special items. Analysts on average are looking for $2.42 per share.

"We are feeling more optimistic as we think about 2014," Chief Executive Robert Friel told Reuters in a telephone interview. "The diagnostics, research and environmental markets all appear to be in a better position this year versus the same time last year."

At this time last year, U.S. budget battles and automatic spending cuts known as sequestration hit academic research hard. This year, the National Institutes of Health (NIH) budget has been set.

"They now have some certainty with regard to funding," Friel said of people running laboratories and research facilities. "The U.S. appears to be recovering from a capital expenditure perspective."

Friel also said he is seeing improving conditions in the major markets of Europe, with the exception of France, and said PerkinElmer has not been feeling the pinch from slowing economic conditions in China that have impacted other industries of late.

"While the macro economy may be slowing a little bit, China specifically and the emerging markets more broadly continue to invest fairly significantly in environmental and in healthcare, so we're not seeing any slowdown," he said. "We didn't see it in Q4 and we don't see it in early indications in Q1."

Friel said percentage sales growth in China in the fourth quarter continued to be in the "low teens."

Excluding special items, the company reported adjusted fourth quarter earnings of 73 cents per share, topping analysts' average expectations by 3 cents, according to Thomson Reuters I/B/E/S.

PerkinElmer posted a net profit of $64.5 million, or 57 cents per share, compared with a net loss of $15.9 million, or 14 cents per share, a year ago, when results were hit by an accounting adjustment related to pension liability.

Revenue of $593.3 million topped Wall Street estimates of $589.1 million.

In addition to an improving economic picture, Friel pinned some of his optimism for 2014 on moves the company made throughout 2013.

"We did a lot on the productivity side where we did some consolidation of facilities, we moved some of our production into lower-cost areas and we've made a number of investments into new products," Friel said. "That's an area we're particularly excited about going into 2014."