* 4th quarter EPS 65 cents vs Street view 62 cents
* Revenue up 6 percent to $572.9 million
* Company sees 2013 adjusted EPS $2.24 to $2.32
By Bill Berkrot
Jan 31 PerkinElmer Inc on Thursday
reported higher-than-expected fourth-quarter profit, but the
maker of scientific instruments issued a 2013 earnings forecast
range with a midpoint below Wall Street estimates.
For 2013, the company forecast adjusted earnings of $2.24 to
$2.32 per share and organic revenue to rise in the
mid-single-digit range. PerkinElmer would have to hit the top of
that range to meet current Wall Street expectations, according
to Thomson Reuters I/B/E/S.
"The mid-single-digit (revenue growth) range is roughly in
line with what we've been seeing from life sciences companies,
maybe a little better," said Morningstar analyst Alex Morozov.
The earnings forecast is somewhat constrained by near-term
spending that the company is planning.
"We see a lot of opportunity, particularly in the first half
of the year, to invest in some very exciting growth
opportunities. We think it's appropriate for us to make these
investments now," Chief Executive Robert Friel said in a
For the fourth quarter of 2012, PerkinElmer posted earnings
of 65 cents per share, excluding special items, topping
analysts' average expectations by 3 cents.
The 2013 outlook also assumes continued customer uncertainty
over the potential for large, automatic U.S. spending cuts,
known as sequestration, that would kick in in March if Congress
fails to come up with a budget agreement.
Earlier on Thursday, PerkinElmer's larger rival Thermo
Fisher Scientific issued a 2013 forecast that assumed
sequestration cuts, with its CEO saying he was convinced it
PerkinElmer's Friel said 2013 is likely to look a lot like
"Clearly the threat of sequestration has had some chilling
impact on funding and the ability for the academic institutions
to invest in capital equipment," Friel said.
He said the funding uncertainty had a dampening impact in
2012 and "will continue to have an impact in 2013, and so that's
what we're assuming."
"Our exposure to U.S. NIH (National Institutes of Health)
and academic funding is in the mid-single digits, so it's not as
big of an impact on us as it is for some of our peers," he said.
The company, which also makes diagnostic equipment and
environmental safety monitoring products, had a net loss for the
quarter of $15.8 million, or 14 cents per share, primarily due
to an accounting adjustment related to pension liability. That
compared with a loss of $83.6 million, or 74 cents per share, a
year earlier that included large charges.
Revenue rose 6 percent to $572.9 million, just shy of the
$578 million Wall Street was estimating.
The Human Health unit saw sales rise 6 percent to $275
million, with particular strength from the diagnostics business,
such as prenatal and newborn testing in emerging markets and the
"U.S. birth rates turned slightly positive at the end of the
year after years of declines. That takes away a headwind for
us," Friel said.
Based on the fourth quarter and the first month of this
year, Friel said economic conditions in Europe continue to be a
concern. "Particularly in the fourth quarter, we did see a
fairly significant decline in Europe," he said.
Environmental Health segment sales rose 3 percent to about
$300 million, buoyed by air quality and food safety testing
equipment sales in China. Overall, sales in China rose by more
than 20 percent in the quarter.
"We feel a little bit better about U.S. growth prospects,
still concerned about Europe and feel good about China and the
emerging markets," Friel said.
PerkinElmer shares were flat in extended trading after
closing up 0.7 percent at $35.24 on the New York Stock Exchange.