Quintiles posts mixed third-quarter results, strong new business

Posted by David Ranii on October 31, 2013 


Quintiles Transnational is a medical research company in Durham.


  • Quintiles executive leaving

    The president and chief operating officer of Quintiles, John Ratliff, is departing the world’s largest pharmaceutical services company at the end of December after a nine-year run.

    Quintiles spokesman Phil Bridges said Ratliff’s resignation, announced Thursday morning, was “a personal decision for John, and Quintiles wishes him well.” Bridges also said that Ratliff wasn’t available to comment on his decision or his future plans.

    Ratliff joined Quintiles as chief financial officer in 2004 and was named COO in 2006. He was named president in August 2010. Ratliff also has been a member of Quintiles’ board of directors since 2006; he’s retiring from that role as well.

    Tom Pike, CEO of the Durham-based company, addressed Ratliff’s departure during the company’s third-quarter earnings conference call with analysts.

    “Over the decade we were private, John provided great leadership,” Pike said. “John has also been a great partner to me.” Quintiles went public in May.

    Pike also expressed confidence that the management transition will be a smooth one.

    “Quintiles has a strong global executive team,” he said. “I believe it’s the best in the business.”

    “I’m confident,” he added, “in the ability of our deep management team to continue to execute on our day-to-day operational delivery needs while also innovating to deliver value to our customers.”

    Quintiles’ announcement included a statement from Ratliff talking about the “tremendous experience” he has had at Quintiles.

    “The difference this company has made in people’s lives is truly amazing, and I am extremely proud to played a part in it,” Ratliff said. “I love Quintiles and wish the best of luck to the entire organization.”

    Staff writer David Ranii

Quintiles posted mixed results in the third quarter – it beat Wall Street’s expectations for earnings per share while falling short on revenue – but reported a big jump in new business commitments.

“We believe the quarter was a positive for Quintiles,” Tim Evans, an analyst with Wells Fargo Securities, wrote in a research note. “Weaker revenue was more than offset by strong gross margin” and cost controls.

Meanwhile, new business commitments grew 29 percent in the quarter – the fifth consecutive quarter that it reported more than $1 billion in new business. Quintiles’ backlog is now $9.6 billion.

Chief Financial Officer Kevin Gordon hinted at hiring additional employees in the near term to handle the influx of new business.

“As we go through the rest of this year and into the early part of next year, as we ramp up some of that significant net new business, there will be a need for us to add resources,” Gordon said during a conference call with analysts.

Quintiles spokesman Phil Bridges declined to comment on the company’s future hiring plans.

In May, Quintiles disclosed that it was cutting about 400 jobs worldwide, but it also noted that the company had 900 open positions it was looking to fill. Durham-based Quintiles has 28,000 employees worldwide, including nearly 2,300 in the Triangle.

Quintiles released its third-quarter earnings Thursday before the markets opened. The stock closed Thursday at $41.99, down $1.39. The company went public at $40 a share in May.

Quintiles, the world’s largest pharmaceutical services company, is best-known as a contract research organization, or CRO, that helps pharmaceutical and biotechnology companies test experimental drugs. It also assists those companies with selling and marketing medicines once they win regulatory approval.

Quintiles generated $932.7 million in revenue in the third quarter, up 2 percent from a year ago. Analysts were anticipating $952 million in revenue.

Adjusted net income totaled $71.9 million, up 37 percent from from a year ago. That amounted to earnings of 54 cents per share; analysts had expected 50 cents per share.

“We are very pleased with our solid third-quarter performance,” said CEO Tom Pike.

The world’s largest pharmaceutical services company also raised its guidance on earnings per share for the full year to a range of $2.03 to $2.09. The company previously was projecting $1.95 to $2.05 on a per-share basis.

As is common with IPOs, company insiders who owns Quintiles shares haven’t been permitted to sell those shares. But that “lockup” period expires Nov. 17.

The expiration of lockups can trigger a wave of sales that can put downward pressure on the stock. So, as a counter-measure, Quintiles announced that this week that its board of directors approved a $125 million stock repurchase program.

The stock buyback program “further demonstrates the confidence we have in our business,” Gordon said.

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