PerkinElmer post a 26 per cent rise in its Q4 profits, boosted by its laboratory and diagnostic equipment sales and confounding Wall Street expectations in the process. The company also expect 2008 first-quarter profit to top analyst estimates.
The health and industrial sciences company posted 2007 profits of $52.6m compared with a figure of $41.7m, during the same period in 2006. Analysts have said PerkinElmer is expected to continue gaining market share in the life sciences industry in Q1 2008.
Health science products, which make up 84 per cent of the company's revenue, rose 19 per cent, driven by strong sales in genetic screening, medical imaging, and analytical science devices.
The life and analytical division posted a 19 per cent revenue rise from $382.1m while optoelectronics revenue rose 22 per cent to $129.4m.
PerkinElmer says its Q4 performance is the result of a recent shift in focus, in which a number of buyouts have expanded the company's product offering, strengthening its presence in a number of key sectors, one of which is biotechnology.
"Our excellent fourth quarter results finish off a year of strong growth for the company," said Gregory L. Summe, chairman and CEO of PerkinElmer.
"The solid fundamentals across our portfolio of businesses reflect the investments that we have made in new products, services and geographic expansion. During the quarter, we also completed the acquisition of ViaCell, a leader in the processing and storage of stem cells from umbilical cord blood. We believe that we are very well positioned to sustain our growth momentum in 2008."
The Q4 figures allow the company's incoming CEO to start his tenure and 2008 on a high after it was announced Summe is to step down from the helm of the company next month.
Summe, who will work part time for PerkinElmer as chairman until April 2009, said he had accepted a job as senior adviser for Goldman Sachs Capital Partners starting February 1. He has been CEO at PerkinElmer since 1998.
His successor, current PerkinElmer president Robert Friel, said he planned to continue Summe's push into driving advancements in Health Sciences and Photonics, building on the foundations already put in place.
PerkinElmer's buyout of ViaCell during the quarter could be an indication of this push into uncharted territory. ViaCell is a company that processes and stores stem cells taken from umbilical cord blood.
While PerkinElmer already makes products to help screen newborns for diseases, the majority of newborns aren't screened at all. And when screening is done, it usually involves a limited number of conditions.
Friel previously said that he believed this would change in the years to come stating that the company was likely to increase testing of mothers and young children as well as infants.
He predicted that within five years, diagnostics would account for half of PerkinElmer's revenue, up from one quarter today.