PerkinElmer Inc. (NYSE:PKI) Q3 2017 Earnings Conference Call Transcript

Nov 02, 2017 • 05:00 pm ET

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PerkinElmer Inc. (NYSE:PKI) Q3 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Q3 2017 PerkinElmer Earnings Conference Call. (Operator Instructions) As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Tommy Thomas, VP of IR. Sir, you may begin.

Executive
Tommy Thomas

Thank you, Heather. Good afternoon and welcome to the PerkinElmer third quarter 2017 earnings conference call. With me on the call are Rob Friel, Chairman and CEO, and Andy Wilson, SVP and CFO. If you have not received a copy of our earnings press release, you may get one from the Investors section of our website at www.perkinelmer.com. Please note that this call is being webcast live and will be archived on our website until November 16, 2017.

(Forward-Looking Cautionary Statements)

I'm now pleased to introduce the Chairman and CEO of PerkinElmer, Rob Friel. Rob?

Executive
Rob Friel

Thanks, Tommy. Good afternoon and thank you for joining us today. I'm very pleased with our performance in the third quarter, as PerkinElmer delivered revenue and EPS at the high end of our previously communicated guidance range, and we continue to make excellent progress on our strategic priorities. Similar to previous quarters, I will briefly review our financial results, discuss overall market conditions and update you on our progress during the third quarter, relative to our strategic priorities, while Andy will discuss our financial results and future guidance in more detail.

Turning to our financial results. We generated revenue of $550 million during the third quarter, which represents growth of 8% over Q3 last year on a reported basis and 5% growth organically. Adjusted operating margins expanded by 30 basis points to 19.3% and adjusted earnings per share was $0.73, representing growth of 14% over Q3 last year. Year-to-date, our financial results are tracking favorably to our original guidance in the beginning of the year. And based on our fourth quarter guidance, we are on track to exceed our full-year guidance communicated back in January for both the top and bottom lines, delivering organic revenue growth of 4% and increasing adjusted earnings per share by low double digits.

Markets continue to be favorable. For the first time in over five years, during the third quarter, we experienced positive organic growth in every region of the world and every end market in which we operate. Looking specifically at our end markets, pharma biotech grew mid-single digits, as strength in service and high content imaging was offset from continuing headwinds in our radionucleotide business. Diagnostics also grew mid-single digits, as emerging markets continue to outpace developed markets.

Our food business was very strong, growing over 20% due to several key customer wins and strong performance from recently introduced new products. Both environmental and industrial markets grew low single-digits, as environmental is continuing to see strong growth in Asia, positive results in Americas, offset by declining revenue in Europe. Our sales to academic customers are also grew low single-digits and recovered from a slow start to the year as funding outside the US has