Quintiles posts mixed third-quarter results, strong new business
10/31/2013 7:50 AM
05/29/2014 6:37 PM
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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