PerkinElmer (PKI) to Post Q2 Earnings: What's in the Cards?

PerkinElmer, Inc. PKI is slated to release second-quarter 2020 results on Jul 28, after the closing bell. In the last reported quarter, the company delivered earnings surprise of 42.6%.

Q2 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share is pegged at 80 cents, suggesting a decline of 20% from the year-ago quarter.

Diagnostics Revenues: A Key Catalyst

PerkinElmer's Diagnostics segment is likely to have contributed to the to-be-reported quarter’s performance. Strength in applied genomics business might get reflected in the segment’s second-quarter revenues.

Further, the continued rise in infectious and autoimmune diseases, especially in emerging markets, may have benefited the segment.

In May, the company received EUA from the FDA for EUROIMMUN’s (a PerkinElmer company) Anti-SARS-CoV-2 ELISA (IgG) serology test. Clinical laboratories certified under CLIA can start utilizing this ELISA for the detection of antibodies of the immunoglobulin class G immediately.

PerkinElmer, Inc. Price and EPS Surprise

 

PerkinElmer, Inc. Price and EPS Surprise

PerkinElmer, Inc. price-eps-surprise | PerkinElmer, Inc. Quote

Also, in March, the company received Emergency Use Authorization (EUA) from the FDA for its New Coronavirus reverse transcription polymerase chain reaction (RT-PCR) test.

With the aforementioned tests, PerkinElmer is likely to have boosted its Diagnostics business and strengthened presence in the global infectious disease diagnostics market. This, in turn, might have favored the company’s performance in the quarter to be reported.

Other Factors to Note

PerkinElmer is likely to have witnessed solid international growth in the to-be-reported quarter. Improved growth momentum in Europe and consistent growth trend in the United States might have contributed to the second-quarter performance. However, it is important to note here that the COVID-19 pandemic may have weighed on international growth during the second quarter.

During fourth-quarter 2019, PerkinElmer introduced several new Cisbio kits for phosphorylate and total protein and biomarker detection.

Moreover, in December, the company received the FDA approval for its GSP Neonatal Creatine Kinase – MM (CK-MM) kit, which is the second commercially available assay for screening newborns affected by Duchenne muscular dystrophy (DMD).
Thus, the positive impact of such developments is likely to get reflected in the second-quarter results.

Additionally, the company’s Discovery product portfolio may have witnessed strong demand courtesy of sustained robust performance by life sciences.

The company’s bottom line is anticipated to reflect organic revenue growth and better margin expansion. In fact, for the second quarter, earnings per share is expected to be at least 65 cents. In terms of revenues, the company projects reported revenues between $610 million and $720 million in the second quarter.

Productivity initiatives and volume leverage are likely to have contributed to the company’s second-quarter gross and operating margins. New product introductions might have improved product mix and thereby gross margin.

Additionally, the company has been implementing plans to invest in high-growth areas and shift the organization to a more unified structure. This, in turn, is likely to have driven operating margin expansion in the to-be-reported quarter.

However, PerkinElmer’s exposure to the international markets increases the risk of foreign exchange volatility. In fact, the company anticipates foreign exchange to affect second-quarter 2020 revenues by approximately 2%.

Here’s What the Quantitative Model Suggests

Our proven model predicts an earnings beat for PerkinElmer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: PerkinElmer has an Earnings ESP of +22.13%. 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 #1.

Other Stocks Worth a Look

Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.

Integra LifeSciences Holdings Corporation IART has an Earnings ESP of +20.69% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +6.69% and a Zacks Rank of 2.

Hologic, Inc. HOLX has an Earnings ESP of +12.27% and a Zacks Rank of 3.

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