PerkinElmer Inc (PKI.N) on Thursday reported lower second-quarter earnings that exceeded tempered expectations after Wall Street had been caught off guard by a disappointing first quarter.
The maker of scientific instruments, medical diagnostic equipment and environmental safety monitoring products raised the low end of its full-year earnings forecast range by 3 cents, and said it was on track to meet its own expectations. But the new forecast remained below the company's initial 2013 outlook.
PerkinElmer said it now sees full-year adjusted earnings of $2.03 per share to $2.10 per share.
The company had initially projected $2.24 a share to $2.32 per share, but was forced to lower the forecast as tough economic conditions in Europe and a strong dollar that hurt sales in Japan took a heavy toll on first quarter results.
However, things are looking up, according to Chief Executive Robert Friel.
"All three areas that caused the headwind for us in the first quarter saw nice improvement sequentially," Friel said in a telephone interview.
"We saw some recovery in Japan. Europe went from down mid-single digits to up low-single digits. And in vivo imaging was up quite significantly," Friel said.
PerkinElmer posted a net profit from continuing operations of $26.9 million, or 24 cents per share, compared with a profit of $33.6 million, or 29 cents per share, a year ago.
Excluding special items, such as restructuring costs, the company earned 51 per share, beating analysts' average expectations by 3 cents, according to Thomson Reuters I/B/E/S.
Revenue for the quarter rose 4 percent to $543.3 million, about $10 million above Wall Street estimates. The company still sees full 2013 revenue growth in the low-single digits.
The strong dollar against some foreign currencies continued to reduce sales somewhat in those markets, as it has for many U.S. companies in the first half of the year.
"It wasn't anything more than we had expected or forecast," Friel said. "It does create a little bit of headwind in the back half (of the year) as well, but that was all built into our assumptions."
Friel said the third quarter so far is on track with company forecasts.
"One of the nice things as I look at the back half of the year is we put ourselves in a great position from a cost structure standpoint to hopefully weather the difficult economic environment, and more importantly allow us to continue to invest in growth in some attractive end markets," he said, citing newborn screening, infectious diseases in emerging markets and environmental testing.
The company believes it is well positioned to take advantage of China's massive spending to improve air and water quality. It saw second quarter sales in China grow in the high teens after several quarters of at least 20 percent growth there.
"We're in good shape to assist the Chinese government in working with their environmental problems," Friel said.
(Reporting by Bill Berkrot; Editing by Jim Loney and Carol Bishopric)