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Covance Inc. (CVD) Reports Second Quarter Net Revenue Growth Of 8.0% To $639 Million, Pro Forma EPS Growth Of 21.5% To $0.95 And Adjusted Net Orders Of $773 Million


7/30/2014 8:49:04 AM

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PRINCETON, N.J., July 29, 2014 /PRNewswire/ -- Covance Inc. (NYSE: CVD) today reported results for its second quarter ended June 30, 2014.  Net revenue was $639 million, representing 8.0% growth from the second quarter of 2013.  On a GAAP basis, the company reported earnings of $0.29 per diluted share in the second quarter.  The company reported pro forma earnings per diluted share of $0.95, up 21.5% over the second quarter of 2013. Pro forma results exclude asset impairment charges totaling $52.6 million, or $0.61 per share, and charges associated with restructuring and other cost reduction actions totaling $4.2 million or $0.05 per share.

"In the second quarter, a stronger-than-expected performance in Early Development and continued strong growth in central laboratories more than offset lower-than-expected growth in clinical development, leading to year-on-year revenue growth of 8%, expanded pro forma operating margins of 11.9%, and a 21.5% year-on-year increase in pro forma EPS," said Joe Herring, Chairman and Chief Executive Officer. "Commercial performance strengthened from the first quarter, with second quarter adjusted net orders of $773 million resulting in an adjusted net book-to-bill of 1.21 to 1.  

"In Early Development, revenue of $231.2 million grew 7.7% year-on-year and 5.9% sequentially while pro forma operating margin increased 200 basis points year-on-year and 360 basis points sequentially to 13.3%. These better-than-expected results were driven by growth in demand for toxicology and pharmaceutical chemistry services, and continued strength in clinical pharmacology services.

"Late-Stage Development second quarter revenue grew 8.1% year-on-year to $408.3 million and pro forma operating margins were 22.1%, up 70 basis points from a year ago, but down 110 basis points from the strong first quarter margins on higher IT spending.  Central laboratories and clinical development grew 11% and 4%, respectively, and market access services resumed year-on-year growth.

"Looking ahead, we expect increases of a few cents in earnings per share in both the third and fourth quarter. We now expect 2014 revenue growth of 6% to 8% and pro forma diluted earnings per share of $3.78 to $3.92 (excluding the gain on sale, costs associated with our restructuring activities, asset impairment charges and assuming foreign exchange rates remain at June 30, 2014 levels)."

Consolidated Results



To read full press release, please click here.

($ in millions except EPS)

2Q14

2Q13

Change

YTD14

YTD13

Change

Total Revenues

$687.1

$644.0


$1,353.4

$1,278.3


Less: Reimbursable Out-of-Pockets 

$47.6

$51.7


$93.9

$105.8


Net Revenues

$639.5

$592.3

8.0%

$1,259.5

$1,172.5

7.4%

Operating Income

$19.3

$51.5

(62.6%)

$86.2

$99.8

(13.6%)

   Operating Margin

3.0%

8.7%


6.8%

8.5%


Net Income

$16.9

$41.0

(58.7%)

$67.8

$89.2

(24.0%)

Diluted Earnings per Share

$0.29

$0.72

(59.2%)

$1.17

$1.58

(25.5%)

Restructuring Costs

($4.2)

($6.0)


($8.3)

($12.2)


Asset Impairments

($52.6)

-


($52.6)

-


Operating Income, excluding items*

$76.0

$57.5

32.2%

$147.1

$ 111.9

Read at BioSpace.com


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