PRINCETON, N.J., Nov. 2, 2011 /PRNewswire/ -- Covance Inc. (NYSE: CVD) today reported GAAP earnings for its third quarter ended September 30, 2011 of $0.67 per diluted share. Included in third quarter results is approximately $0.06 per diluted share in costs from the previously-announced restructuring actions, partially offset by a gain of approximately $0.01 from favorable income tax developments in the quarter. Excluding these items, earnings per diluted share were $0.71 in the quarter.
“On a consolidated basis, third quarter net revenues grew 13.9% year-on-year and pro forma operating margin (when excluding the $5.3 million of restructuring costs), expanded 10 basis points sequentially to 10.4%,” said Joe Herring, Chairman and Chief Executive Officer. “In Early Development, revenues grew 16.3% year-on-year and 3.6% sequentially to $240 million and pro forma operating margin increased to 14.6% versus 10.7% a year ago and 14.2% last quarter. We forecast another quarter of sequential growth in both revenue and operating margin for our early development services in the fourth quarter. In Late-Stage Development, revenues grew 12.0% year-on-year and 5.8% sequentially driven by the continued strong performance in our clinical development services as well as the impact from foreign exchange. As forecasted, pro forma operating margin in the segment declined slightly to 19.3%, reflecting seasonal patterns as well as the impact from significant hiring in clinical development, which had year-on-year revenue growth of 18% through the first nine months of 2011.
“On the commercial front, adjusted net orders in the third quarter were $597 million, representing an adjusted book-to-bill of 1.1. We were particularly pleased to see a significant improvement in orders in our central laboratory, which reported its highest adjusted net order quarter in over a year, as well as continued improvement in orders for our toxicology services.
“Covance now expects full-year revenue growth in the high single-digit range and pro forma earnings to be approximately $2.70 per diluted share, excluding costs associated with restructuring activities and assuming foreign exchange rates remain at September 30, 2011 levels.”
