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PerkinElmer goes from strength to strength

By Dr Matt Wilkinson , 31-Jul-2008

Robert Friel’s tenure as CEO of PerkinElmer continued its strong start with the firm reporting a 21 per cent increase in second quarter revenues compared to the same period last year.

Friel replaced Gregory L. Summe as CEO in February and has maintained the company’s solid growth with the life science and optoelectronics firm reporting second quarter revenues of $528.6m (€335.9m) - a 22 per cent increase compared with the $437.3m reported for the same period last year.

However, the company’s operating profits failed to match the revenue growth, with the firm reporting operating profits of $42.1m for the quarter, nearly a 6 per cent decrease on the previous years figure of $44.6m.

This fall can be accounted for by soaring sales and administration expenses, which increased nearly 31 per cent to hit $143m for the quarter. Last year’s results also included a $15.3 million gain due to the settlement of an insurance claim.

The firm’s net income also took a hit during the quarter, dropping nearly 30 per cent to $23.7m due to the lower operating profit and the loss of $6.8m from discontinued operations.

PerkinElmer’s Life and Analytical Sciences segment reported second quarter revenues of $397.1m, up 22 per cent on the same period last year. The company’s Optoelectronics business also showed strong growth, with revenues growing 19 per cent to $131.6m.

According to Friel, the company saw particularly strong growth for prenatal and neonatal screening as well as for digital x-ray equipment used to improve patient diagnoses.

“The biopharma market appears to be stabilising, but at relatively modest growth rates,” said Friel.

“In Q2, we experienced growth in the high single digits in the biopharma end markets through the strong growth of our reagent sales as a result of several new product introductions and good market receptivity to our recently introduced customer custom assay services.”

He also highlighted how the company’s One Source service offering, which helps pharma firms reduce the cost of regulatory compliance by qualifying and validating analysis equipment from a range of vendors, “experienced strong growth benefiting from large pharma's increasing desire to outsource laboratory assets and thereby reduce costs and improve productivity of their lab assets.”

Research and development costs for the quarter rose in monetary terms to $29.9m from $27.3m in 2007. However as a percentage of revenues this equated to a slight decrease, accounting for 5.65 per cent of the company’s income, a figure still above the industry average.

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