Key Factors To Influence PerkinElmer's (PKI) Q4 Earnings

PerkinElmer, Inc. (NYSE:PKI) is expected to release fourth-quarter 2017 results on Jan 25, after the market closes. In the last quarter, the company registered adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate of 72 cents. Further, adjusted revenues of approximately $554 million also beat the Zacks Consensus Estimate of $552 million.

Solid performances in the Discovery and Analytical Solutions unit as well as Diagnostics segment will drive PerkinElmer’s top line in the fourth quarter. In fact, the Zacks Consensus Estimate for Discovery and Analytical Solutions revenues is currently pegged at $437 million. This reflects an improvement of 13.5% from the third quarter. Further, the Zacks Consensus Estimate for the Diagnostics segment revenues is pegged at $180 million, up 6.5% from the last quarter.

Notably, PerkinElmer has also outperformed the industry over the last year. The stock has gained 52% surpassing the industry’s rally of 47.7%.

Let’s take a look at how things are shaping up prior to the fourth-quarter earnings announcement.

Factors to Consider

View Upbeat: The Zacks Consensus Estimate for PerkinElmer’s fourth-quarter earnings is at 94 cents per share, reflecting year-over-year growth of 13.3%. For revenues, the consensus estimate is pegged at $615.8 million, up 8.7% year over year.

Earlier, management confirmed that the company has been progressing favorably per the original guidance cited in the beginning of fiscal 2017. Expecting a better-than-expected financial result for the fourth quarter, the company revised its guidance of adjusted earnings per share for the full year.

In this regard, PerkinElmer now expects full-year adjusted earnings per share in the band of $2.80-$2.90, compared with the previous range of $2.75-$2.85. Further, post the first-quarter earnings, the company raised its revenue guidance as well.

Favorable Market Trends: PerkinElmer continues to witness favorable market conditions. For the first time in more than five years, the company experienced positive organic growth in every region of the world and end market in which it operates in the last quarter. We expect the company to maintain this momentum in the quarter to be reported. Looking specifically at the end markets, pharma biotech and diagnostics are expected to see strong sales in the fourth quarter.

Acquisition to Drive Growth: Acquisitions and strategic partnerships have proved to be key growth catalysts for PerkinElmer. Recently, the company completed its previously announced acquisition of EUROIMMUN Medical Laboratory Diagnostics AG. Through this acquisition, EUROIMMUN expanded PerkinElmer’s reach in the autoimmune and allergy diagnostic markets. It also fortified the company’s foothold in curing new infectious diseases. The management is optimistic about acquisition-driven growth in fiscal 2018.

Solid Product Portfolio: PerkinElmer delivers a comprehensive suite of scientific informatics and software solutions to aggregate data into actionable insights in an automated and scalable way. The company launched its new mass spectrometry platform, QSight Triple Quad LC/MS/MS for the clinical market in the last quarter. While QSight has already received a very positive response in the niche space, this is expected to provide PerkinElmer a competitive edge in the MedTech space in the fourth quarter.

The company’s products include the industry leading ChemDraw software, Electronic Lab Notebooks including cloud-based Elements SaaS Offering and enterprise E-Notebook Solutions, along with the TIBCO Spotfire platform for scientific data analytics.

PerkinElmer’s expanding portfolio is helping the company win market share worldwide.

Thus, PerkinElmer is confident of improving growth trajectory in the fourth quarter.

Our quantitative model conclusively shows an earnings beat for PerkinElmer this quarter.This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.

Zacks ESP: Earnings ESP for PerkinElmer is +0.21%. The Most Accurate estimate is $0.94, which is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PerkinElmer carries a Zacks Rank #2. A favorable Zacks Rank increases the predictive power of ESP and the company’s positive ESP makes surprise prediction feasible.

Stocks Worth a Look

Here are a few similar medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

Bio-Rad Laboratories, Inc. (NYSE:BIO) has an Earnings ESP of +4.45% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank Stocks Here.

BIOVERATIV Inc. (NASDAQ:BIVV) has an Earnings ESP of +2.56% and a Zacks Rank #1.

Baxter International Inc. (NYSE:BAX) has an Earnings ESP of +1.52% and a Zacks Rank #3.

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