Parexel posts strong profit in Q4

By Emilie Reymond

- Last updated on GMT

Related tags Cent Generally accepted accounting principles

Parexel has posted strong financial results for the fourth quarter
of its fiscal year while it is finally starting to reap the fruits
of its labour in the medical communications business.

The contract research organisation's (CRO) operating income rose 29 per cent in the fourth quarter, ending 30 June 2007, to $16.9m (€12.2m) from $13.1m in the year-ago quarter. In addition, sales totalled $254.0m in the period, an 18.5 per cent increase on last year. This was driven by a 21 per cent increase in service revenue, which reached a record $205.2m, the company said. Parexel's contract service business includes the Clinical Research Services (CRS) segment, Parexel Consulting and Medical Communications Services (PCMS), and Perceptive Informatics. The CRS business, which represents the biggest chunk of the company's services operations, generated $152.7m in the period, a 26 per cent jump from the year-ago quarter. The Perceptive Informatics unit also performed well with a 25 per cent rise in revenue to $19.2m. And the PCMS segment seems to finally be on the road to recovery from its past difficulties, generating $33.3m, a 1.6 per cent increase from the comparable quarter of 2006. The PCMS unit has been the poor performer of the company in the past few quarters and the steps the company has been taking to turn things around seem to be finally paying off - back in January, the CRO made redundancies in the segment in order to cut costs and had expecting to see positive results in the fourth quarter. This improvement in the quarter is also reflected in the overall performance of the PCMS operations, with revenue of $120.6m for the 2007 fiscal year, a 3 per cent increase compared to the previous year. Meanwhile, the flow of new business was strong in the fourth quarter, the company said, with a fiscal year end 2007 backlog of approximately $1.5bn, an increase of around 38 per cent over the backlog reported for the end of fiscal year 2006. The company's operating income was also on the rise for the full fiscal year reaching $57.6m, a whopping 44.4 per cent improvement from the previous year. The company slightly raised its forecast for the full fiscal year and now expects service revenue to be in the range of $855 to $885m, versus previously issued revenue guidance of $850 to $880m.

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