Quintiles ups EPS and narrows rev forecast

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Quintiles ups EPS and narrows rev forecast
Quintiles ups EPS and narrows rev forecast
Quintiles issued a mixed set of revised financial predictions for 2013, increasing its earnings per share forecast after a surge of new business wins and narrowing its service revenue.

The US contract research organisation (CRO) increased its earnings forecast to $2.03 to $2.09 per share from $1.95 to $2.05 earlier today citing a 29% increase in new contracts to $1.3bn. The firm’s backlog also increased from $9bn to %9.6bn by the end of September.

In a press statement issued earlier today CEO Tom Pike said: “We continue to gain market share as reflected in the strength of our net new business and the largest backlog in the industry."​ 

Quintiles’ total revenue for the period was flat at $1.2bn with the contribution from its product development arm growing 5.5% to $714.2m. This contrasted with the performance of its integrated healthcare services (IHS) unit, which saw revenue slide 7.6% to $218.5m.

Pike was not too concerned about the IHS revenue decline, again citing Quintiles new business as evidence of positive momentum.  

We have delivered income from operations margin expansion sequentially and year over year within our Product Development segment while improving the performance of our Integrated Healthcare Services segment as demonstrated by the strong new business wins during the quarter and continued income from operations margin improvement compared to the first quarter of 2013​.”

Pike also pointed to the firm’s recent acquisition of Novella Clinical as positive​ for the firm’s services business.

We have further differentiated our service offerings with the acquisition of Novella Clinical in the third quarter, strengthening our capabilities focused on emerging biopharma, oncology and medical devices​.”

Nevertheless, Quintiles still narrowed its full-year services revenue earnings forecast to $3.77bn-$3.80bn from $3.76bn-$3.81bn.

ISI analyst Ross Muken predicted that Quintiles results will meet with a positive reaction, suggesting that the fact the firm’s revenue was slightly below consensus estimates was “largely offset by the EPS beat & raise, and very strong bookings momentum​.”

Quintiles’ conference call is scheduled for later this afternoon.

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