Pharmaceutical services giant Quintiles posted a better-then-expected 26 percent jump in net income in the fourth quarter and its annual revenue topped the $4 billion milestone for the first time.
The Durham-based company also projected that its earnings per share for all of 2015 will range from $3.02 to $3.13. That was ahead of Wall Street’s expectations.
“Quintiles posted an outstanding quarter in terms of bookings and margins, while revenue was effectively in line with our estimate,” Wells Fargo analyst Tim Evans wrote in a research note. “We would expect the stock to be strong today.”
Quintiles shares rose 4.2 percent, or $2.57, to close at $63.25 on Tuesday. The stock is up 28 percent over the past year.
CEO Tom Pike said on a conference call with analysts that net new bookings, a leading indicator of future performance, rose 22 percent in the quarter.
“We are looking for 2015 to be another strong year for Quintiles,” said Kevin Gordon, chief financial officer.
Quintiles is the world’s largest contract research organization with more than 32,000 employees worldwide, including 2,500 in the Triangle. CROs help pharmaceutical and biotechnogy companies test experimental drugs and analyze the results.
Quintiles also assists those companies with selling and marketing prescription medicines once they win regulatory approval.
Revenue rose 6 percent to $1.06 billion in the fourth quarter, whereas analysts had projected $1.07 billion in revenue, according to Bloomberg News.
Revenue growth was 9.3 percent after adjusting for currency fluctuations, a reflection of the strong U.S. dollar.
Adjusted net income was $91.8 million, or 71 cents per share, up 26 percent. That was 4 cents per share better than projected.
Pike projected that the overall CRO market will rise between 6 percent and 8 percent this year.
The Triangle has more CRO companies and CRO workers than anywhere else in the world. It boasts three of the eight largest CROs – Quintiles, which ranks No. 1, INC Research and PRA Health Sciences – as well as a host of smaller CROs.
Pike said the large CROs have been grabbing market share from their smaller competitors, a trend he expects to continue as clinical trials increasingly become more global.
“I just don’t know how the smaller CROs are going to compete,” he said, questioning whether small companies can make the necessary investments to keep up. “We are able to lower the cost for customers by using low-cost resources, technology, etc.”
For all of 2014, Quintiles revenue rose 9.4 percent to $4.16 billion. Revenue rose 10.1 percent after adjusting for currency fluctuations.
Adjusted net income for the year totaled $353.4 million, up 34 percent from a year ago.