November 7, 2016 / 9:52 PM / in a year

UPDATE 2-PerkinElmer sales fall, profit edges past expectations

(Adds analyst comment)

By Bill Berkrot

Nov 7 (Reuters) - Scientific instruments maker PerkinElmer Inc on Monday reported its third-quarter revenue declined, missing Wall Street estimates, and it lowered the high end of its full-year earnings forecast by 8 cents.

However, aided by lower costs, the company managed to post a profit slightly above analysts’ expectations.

Excluding special items, PerkinElmer had adjusted earnings of 68 cents per share, topping analysts’ average expectations by 2 cents, according to Thomson Reuters I/B/E/S.

“Core growth was broadly disappointing, however solid margin management cushioned the blow and allowed for a slight EPS beat,” Evercore ISI analyst Ross Muken said in a research note, adding that cost controls “offset the entirety of the revenue shortfall and saved operating profit.”

PerkinElmer narrowed its 2016 forecast and now sees adjusted earnings of $2.75 to $2.77 per share, down from its prior view of $2.75 to $2.85. The new midpoint is 4 cents below Wall Street estimates of $2.80 per share.

Sales for the quarter fell to $548 million from $563 million in the year-ago quarter. That was well short of Wall Street forecasts of $572.2 million.

“Our top-line performance was disappointing as our capital-intensive businesses experienced challenging market conditions,” Chief Executive Robert Friel said in a statement.

The company, which also makes environmental and food safety testing products, posted a net profit from continuing operations of $57.7 million, or 52 cents per share, compared with a profit of $54.9 million, or 48 cents a share, a year ago.

The Human Health division, which includes neonatal testing and other diagnostic equipment, saw sales fall 2 percent in part due to fewer selling days than in the year-ago quarter.

Environmental Health sales fell 5 percent due to constraints on capital spending for expensive equipment by customers.

However, cost of revenue and selling, general and administrative costs fell in the quarter. (Reporting by Bill Berkrot; Editing by Phil Berlowitz and Leslie Adler)

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