Propelled by strong fourth-quarter revenue results that outpaced Wall Street’s projections, pharmaceutical services company INC Research is projecting that its annual revenue will surpass the $1 billion mark this year.
The Raleigh-based company’s guidance for 2016 forecasts that its service revenue for the year will rise between 10 percent and 12 percent in 2016, which would push revenue in the range of $1.005 billion to $1.025 billion.
INC issued its guidance Thursday before the markets opened in conjunction with the release of its fourth-quarter results.
Revenue in the quarter rose 12.9 percent to $241.4 million despite “substantial foreign currency headwinds” that shaved $9.5 million in revenue, CEO Jamie Macdonald told analysts during a conference call. Analysts polled by Thomson Reuters had anticipated service revenue of $239 million.
INC’s rate of revenue growth in the fourth quarter exceeds all of its publicly traded competitors that have reported results. INC is a contract research organization, or CRO, that helps pharmaceutical and biotechnology companies test experimental drugs and analyze the results.
Adjusted net income doubled to $31.4 million, or 54 cents per share. That’s 5 cents per share more than analysts expected.
“I’m pleased to report we had a strong finish to our first full year as a public company, continuing to exceed our expectations,” Macdonald said. INC went public in November, 2014.
The company’s net new business awards in the fourth quarter totaled $316.3 million, up 6 percent from a year ago. That’s a conservative figure that excludes $100 million in new business that the company won but didn’t record because of concerns that the clinical trials might not move forward as a result of “a funding issue” or other problems, said Chief Financial Officer Greg Rush.
Macdonald said that the company is doing especially well winning awards for clinical trials “that are particularly complex,” such as those involving experimental cancer drugs.
Service revenue for all of 2015 increased 14.2 percent to $914.7 million. Currency fluctuations reduced revenue by $45.4 million.
Adjusted net income for the year totaled $120.2 million, or $2 per share, up from $44.6 million a year ago.
INC shares were trading at $39.50, down 55 cents, Thursday morning. Its shares have fallen 18 percent.