Parexel Reports 33% Drop in Income, Ups Guidance
Parexel’s second quarter net income fell 33% to $3.5 million, or $0.06 per diluted share, compared with the same quarter last year.
Parexel increased its fiscal year 2010 service revenue forecast from previously issued guidance. The contract research organization (CRO )expects service revenue in the range of $1.125 to $1.145 billion (up from $1.115 to $1.145 billion) with earnings per diluted share to be in the range of $0.66 to $0.72 (up from $0.60 to $0.70).
For the three months ended Dec. 31, 2009, service revenue increased 3.2% to $284.7 million compared with $275.8 million in the prior year period, but this increase was a result of the positive impact of foreign exchange to the tune of $14 million. Excluding the foreign exchange dollars, revenue decreased 2% from the second quarter 2008. Year-to-date service revenue increased 1% to $544.5 million compared with $538.9 million in the prior year period.
The company incurred $14.3 million in restructuring fees during its second quarter, as well as a $6.1-million charge for the impairment of an investment. The CRO expects to record an additional $14 million in restructuring charges during the third quarter of fiscal year 2010, equating to approximately $0.14 per diluted share.
“Our results for the December quarter capped a solid and positive finish to a challenging year,” said Parexel chairman and CEO Josef von Rickenbach in a statement. “A strong performance on the new business front drove substantive backlog gains, with increases across all three reporting segments. We also continued to improve operating margins, and expect further margin expansion in the coming quarters, as the benefits of restructuring activities and other productivity and efficiency initiatives begin to take hold."