PerkinElmer (PKI) Q2 Earnings and Revenues Surpass Estimates

PerkinElmer, Inc. PKI reported second-quarter 2022 adjusted earnings per share (EPS) of $2.32, which beat the Zacks Consensus Estimate of $2.03 per share by 14.3%. The bottom line, however, declined 18% from the year-ago quarter.

GAAP EPS in the quarter was $1.42 compared with the year-ago quarter's figure of $2.19.

Revenue Details

Based in Waltham, MA, this leading MedTech company reported revenues of $1.23 billion, flat year over year but down 5% organically. However, revenues were up 8% organically after excluding sales of revenue growth from COVID products. The top line surpassed the Zacks Consensus Estimate by 2.5%.

Segment Details

Discover & Analytics Solutions

At this segment, revenues were $661 million, reflecting a rise of 29% from the year-ago quarter. Organically, the segment witnessed an increase of 13%.

Coming to profits at the DAS segment, the company reported second-quarter 2022 adjusted operating income of $178 million, up 76.2% from the year-ago quarter.

Diagnostics segment

Revenues at this segment amounted to $569 million, down 20% on a year-over-year basis. Organically, segment revenues decreased 19% in the second quarter.

Adjusted operating income in the segment totaled $245 million, down 25.3% from the year-ago quarter.

PerkinElmer, Inc. Price, Consensus and EPS Surprise

PerkinElmer, Inc. Price, Consensus and EPS Surprise

PerkinElmer, Inc. price-consensus-eps-surprise-chart | PerkinElmer, Inc. Quote

Margin Analysis

Adjusted gross profit in the quarter amounted to $724.1 million, up 1.8% year over year. Adjusted gross margin, as a percentage of revenues, was 58.9%, up 110 basis points (bps) year over year.

Selling, general and administrative expenses were $330 million, up 17.1% on a year-over-year basis. Research and development expenses amounted to $73.3 million, up 11.4% from the year-ago quarter.

Adjusted operating income was $401.9 million, which declined 2.3% from the year-ago quarter. Adjusted operating margin, as a percentage of revenues, was 32.7%, down 80 bps.

Financial Update

The company exited the second quarter with cash and cash equivalents of $360.8 million compared with $618.3 million a year ago.

Net cash provided by operating activities in the second quarter totaled $97.5 million compared with $287.9 million in the year-ago quarter.

2022 Guidance

PerkinElmer provided guidance for third-quarter 2022 and raised the full-year 2022 outlook.

For third-quarter 2022, the company projects adjusted EPS in the range of $1.40 to $1.45. The Zacks Consensus Estimate is pegged at $1.33 per share. For the same period, revenues are anticipated to be $1.02-$1.03 billion. The Zacks Consensus Estimate for the same stands at $1.02 billion.

For 2022, the company expects adjusted EPS in the range of $7.80 to $7.90, up from the previous range of $7.15 to $7.45. The Zacks Consensus Estimate is pegged at $7.30 per share.

Revenues are anticipated between $4.6 billion and $4.64 billion, compared to previous guidance range of $4.56 billion to $4.63 billion. The consensus mark stands at $4.59 billion.

Conclusion

PerkinElmer exited the second quarter on a strong note, wherein both earnings and revenues beat the respective consensus mark. The company witnessed a solid performance at Discover & Analytics Solutions segment in the quarter under review.

Per management, the company is well-poised to execute both its short and long-term goals on the back of perseverance and team effort.

However, contraction in operating margin is a woe. Weakness in the Diagnostics segment is disappointing. Apart from this, PerkinElmer continues to make acquisitions, which increases integration risks.

Zacks Rank and Stocks to Consider

Currently, PerkinElmer carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the pharma/biotech sector include Lantheus LNTH, ShockWave Medical SWAV and Alkermes ALKS. While Lantheus and ShockWave Medical sport a Zacks Rank #1 (Strong Buy), Alkermes carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Lantheus have improved from earnings of $3.04 to $3.08 for 2022 and $3.33 to $3.62 for 2023 in the past 30 days. LNTH stock has surged 156.6% so far this year.

Lantheus delivered an earnings surprise of 77.82%, on average, in the last four quarters.

ShockWave Medical’s earnings per share estimates have improved from $1.84 to $2.02 for 2022 and from $2.82 to $2.95 for 2023 in the past 30 days. SWAV has declined 19.1% so far this year.

ShockWave Medical delivered an earnings surprise of 189.99%, on average, in the last four quarters.

Alkermes’ earnings per share estimates have improved from breakeven to 4 cents for 2022 and from 56 cents to 59 cents for 2023 in the past 30 days. ALKS has gained 19.6% so far this year.

Alkermes delivered an earnings surprise of 350.48%, on average, in the last four quarters.

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