Biotech Values

[DewDiligence]

PKI is down today because the 2013 EPS forecast—$2.24-2.32 (non-GAAP)
—was below the Street consensus. Still, PKI is up 96% from its 2011 low
and within a few percent of its all-time high. More important, management
remains bullish on growth in emerging markets, particularly China.

http://www.reuters.com/article/2013/01/31/perkinelmer-results-idUSL1N0B0GU920130131

For 2013, the company forecast adjusted earnings [i.e. non-GAAP] of $2.24 to $2.32 per share and organic revenue to rise in the mid-single-digit range. PerkinElmer would have to hit the top of that range to meet current Wall Street expectations, according to Thomson Reuters I/B/E/S.

… For the fourth quarter of 2012, PerkinElmer posted earnings of 65 cents per share, excluding special items, topping analysts' average expectations by 3 cents.

The 2013 outlook also assumes continued customer uncertainty over the potential for large, automatic U.S. spending cuts, known as sequestration, that would kick in in March if Congress fails to come up with a budget agreement. Earlier on Thursday, PerkinElmer's larger rival Thermo Fisher Scientific issued a 2013 forecast that assumed sequestration cuts, with its CEO saying he was convinced it would happen. "Clearly the threat of sequestration has had some chilling impact on funding and the ability for the academic institutions to invest in capital equipment," Friel said.

"Our exposure to U.S. NIH (National Institutes of Health) and academic funding is in the mid-single digits, so it's not as big of an impact on us as it is for some of our peers," he said.

…Revenue rose 6 percent to $572.9 million, just shy of the $578 million Wall Street was estimating.

The Human Health unit saw sales rise 6 percent to $275 million, with particular strength from the diagnostics business, such as prenatal and newborn testing in emerging markets and the United States.

…Environmental Health segment sales rose 3 percent to about $300 million, buoyed by air quality and food safety testing equipment sales in China.

Overall, sales in China rose by more than 20 percent in the quarter.

"We feel a little bit better about U.S. growth prospects, still concerned about Europe and feel good about China and the emerging markets," Friel said.