Reiterate PerkinElmer at Neutral - Analyst Blog

By Zacks | February 12, 2013 AAA

On Feb 7, we retained PerkinElmer (PKI) at Neutral after the company met Zacks Consensus Estimate for earnings but missed revenue estimate for fourth quarter 2012. Why the Retention?

PerkinElmer released its results for the fourth quarter 2012 on Jan 31. The company posted adjusted earnings of 65 cents per share, meeting the Zacks Consensus Estimate and surpassing the year-ago earnings of 62 cents a share. Revenues in the reported quarter increased 6.2% year over year to $572.9 million, missing the Zacks Consensus Estimate of $580 million.

Over the past 30 days, the Zacks Consensus Estimate for 2013 has moved down by a penny to $2.30 while the same for 2014 has dropped by 3 cents to $2.58 during the same timeframe.

The company forecasts adjusted earnings per share for 2013 in the range of $2.24 to $2.32. Reported earnings per share from continuing operations are forecast in the range of $1.57 to $1.65. Organic revenue is expected to increase in the mid-single digits.

PerkinElmer has established itself as a market leader, particularly in the genetic screening segment, and holds one of top two market share positions in several important subsets of the life sciences technology and genetic screening businesses.

The company continues to execute well across several product lines aided by rebounding markets and cost containment efforts. PerkinElmer's transfer of select manufacturing to China has expanded its operating margins. The company has increased its productivity and improved product mix in favor of higher value added products, resulting in higher operating margins.

PerkinElmer, however, operates in a highly competitive industry characterized by rapid technological change and evolving industry standards. As a result, the company must make large investments in R&D in order to retain a competitive pipeline. PerkinElmer competes with Thermo Fisher Scientific (TMO) among others.

PerkinElmer's exposure to poor end market visibility might result in a relatively unattractive risk-reward trade-off for the stock. However, the company's operations, both sales and manufacturing, are diversified on a geographic basis. It has emerged as a higher-growth, higher-margin company vis-à-vis its peers.

Other Stocks to Consider

We currently have a Zacks Rank #3 (Hold) on PerkinElmer. Mettler-Toledo International Inc. (MTD) and Becton Dickinson and Company (BDX) carry Zacks Rank #2 (Buy).  Both stocks are expected to do well.

comments powered by Disqus
Related Analysis
  1. Technical Look At eBay Inc
    Stock Analysis

    Technical Look At eBay Inc

  2. Priming the Pump for Q3 Earnings - Ahead of Wall Street
    Stock Analysis

    Priming the Pump for Q3 Earnings - Ahead of Wall Street

  3. Traders Have Seen This Movie Before
    Stock Analysis

    Traders Have Seen This Movie Before

  4. Bear of the Day: Stage Stores (SSI) - Bear of the Day
    Stock Analysis

    Bear of the Day: Stage Stores (SSI) - Bear of the Day

  5. Bull of the Day: Lands' End (LE) - Bull of the Day
    Stock Analysis

    Bull of the Day: Lands' End (LE) - Bull of the Day

Trading Center