Covance's first quarter profit fell 18%, and the company reduced its 2009 profit guidance. In after hours trading, Covance's shares fell 8.2% to $37.
The contract research organization (CRO) recorded first quarter net income of $40.3 million, or 63 cents a share, down from $49.1 million, or 76 cents a share, a year ago.
Covance cut its 2009 profit guidance to $2.50 to $2.70 per share from $3.00 to $3.20 per share.
First quarter net revenue was up 7% to $468.4 million, but early stage revenue, where Covance is traditionally strong, slipped 5% to $192.5 million.
Joe Herring, Chairman and CEO, Covance, stated, "First quarter results were impacted by reduced market demand in Early Development, resulting in year-on-year and sequential declines in revenue and profitability, offset by record results in Late-Stage Development. Our forecast for Early Development results is to be sequentially flat in the second quarter, followed by sequential growth in the third and fourth quarters. In Late-Stage Development, increased demand led to accelerated revenue growth of 18.2% in the quarter (25% excluding the impact of foreign exchange) and exceptional operating margins of 22.6%."
The company's backlog at March 31 grew 54.4% year-over-year to $4.42 billion compared with $2.86 billion at March 31, 2008 and $4.33 billion at year-end.