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UPDATE 1-PerkinElmer profit meets Wall Street view; not seeking inversion
July 31, 2014 / 9:21 PM / in 3 years

UPDATE 1-PerkinElmer profit meets Wall Street view; not seeking inversion

(Adds CEO interview)

By Bill Berkrot

July 31 (Reuters) - Scientific instruments maker PerkinElmer reported second-quarter profit on Thursday that matched Wall Street expectations and maintained its earnings forecast for the full year as it prepares for the launch of new products.

Revenue for the quarter rose 3 percent to $556.2 million, falling short of Wall Street estimates of $571.7 million.

For the full year, the company, which also sells environmental and food safety testing equipment, continues to expect adjusted earnings of $2.42 to $2.46 per share, with revenue growth in the mid-single digits.

“The end markets are probably a little slower than we anticipated,” Chief Executive Robert Friel said in a telephone interview of sluggish demand from some customers.

“We’ve seen a little bit of a slowing in China ... and a little bit of a headwind relative to academic research. Funding globally has been slow there,” he said.

The food safety monitoring business in China has fallen off, Friel said, contributing to growth in the high single digits. China business growth had been approaching 20 percent previously. The diagnostics business, particularly neonatal testing, remained strong in China, the CEO said.

While PerkinElmer has traditionally been acquisitive, Friel said the Massachusetts-based company was not intent on joining the current inversion craze to take advantage of lower corporate taxes outside the United States.

“We continue to look at opportunities to broaden, but it’s got to be core to our strategy first. We’re not actively looking to re-domicile,” Friel said.

The company posted a net profit of $50.5 million, or 44 cents per share for the quarter, compared with a profit of $27.9 million, or 25 cents a share, a year ago.

Excluding items, PerkinElmer earned 59 cents per share, meeting analysts average expectations, according to Thomson Reuters I/B/E/S.

“I‘m quite excited about the opportunities we see here in the back half of the year and going into 2015 to get some of the new products into the marketplace,” Friel said.

He was especially pleased about a new franchise that looks to take advantage of “growing demand around localized air monitoring in real time.”

The product, called Elm, is being tested around Boston and the company is in talks with several cities about using the system.

But PerkinElmer is not expecting it to generate revenue until 2015, Friel said. (Reporting by Bill Berkrot. Editing by Andre Grenon and Gunna Dickson)

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