Covance Profits Down 3% in Q1 as Central Lab Division Suffers Project Delays
Covance’s revenues grew and income fell in the first quarter of 2010. The company’s first quarter net revenues were $481.9 million, a 9.2% increase over the same period last year. Net income for the quarter fell 2.9% to $39.1 million, or $0.60 diluted EPS, compared with $40.3 million, or $0.63 diluted EPS, in Q1 2009.
Covance said strong performance from its early- and late-stage clinical development divisions helped offset a weak quarter in central laboratories stemming from slower startup of some new trials.
The company already announced plans to close two underperforming sites this quarter, which will eliminate 200 jobs and result in a cost of approximately $0.09 per share in the second quarter.
"As a result of these cost actions (and related savings), coupled with the headwinds created by a stronger U.S. dollar, and delays in the commencement of late-stage studies, we are adjusting our 2010 revenue growth rate expectation to the 5%-8% range and our earnings per share target to $2.40 to $2.65,” said Covance chairman and CEO Joe Herring.
The CRO had originally forecasted 10% revenue growth for 2010 with earnings per share to be in the range of $2.50 to $2.75