* Fourth-quarter adj earnings $0.87/shr vs est $0.84
* Expects 2014 adj earnings $3.65-$4.00/shr vs est $3.81
Feb 4 Research services provider Covance Inc
reported a better-than-expected 19 percent jump in
quarterly adjusted profit as it gained from higher investments
in later stages of drug development by pharma companies.
The company forecast 2014 adjusted earnings of $3.65 to
$4.00 per share, compared to analysts' expectation of $3.81.
Covance, considered a bellwether for the contract research
business, said fourth-quarter revenue jumped 14.5 percent in the
later-stage research business.
Revenue in its earlier-stage research business rose a tepid
5 percent after strong growth in the third quarter, constrained
by declines in drug discovery support and pharmaceutical
Contract research organizations (CROs) offer drug
development outsourcing services, helping pharma companies cut
costs by eliminating the need to maintain in-house laboratories.
Demand for late-stage services tends to be stable, but
drugmakers often delay or halt earlier-stage development work to
The CRO sector came under pressure during the recent
economic downturn after drug companies reduced their research
spending squeezed by high costs, reimbursement pressures and
Covance and rivals such as Charles River Laboratories
International Inc and Quintiles Transnational Holdings
Inc are seeing demand return as pharma companies are more
open to investments in a stable economy.
Covance's net income rose to $45.8 million, or 80 cents per
share, in the quarter ended Dec. 31, from $33.9 million, or 61
cents per share, a year earlier.
Excluding items, the company earned 87 cents per share.
Total revenue rose 10 percent to $669.8 million.
Analysts had expected earnings of 84 cents per share on
revenue of $614.6 million, according to Thomson Reuters I/B/E/S.
Charles River, which mainly offers earlier stage research
services, and Quintiles Transnational report quarterly results