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Home » Parexel Profits Down in Q2, Revenues Up

Parexel Profits Down in Q2, Revenues Up

January 27, 2009
CenterWatch Staff

Parexel’s second quarter financial results, released late Monday, reflect the ill effects of negative foreign exchange rates and a recently terminated contract.

The Waltham, Mass.-based contract research organization (CRO) reported an increase in service revenues for the second quarter of 2009 compared with the prior year, but year-over-year profits were cut by more than half from $11.5 million in the second quarter 2007 to $5.2 million for the quarter ended December 31, 2008.

Service revenues increased 15.6% to $275.8 million for the second quarter of fiscal year 2009, up from $238.7 in the prior year period.

"With regard to our outlook for the current calendar year, I remain cautiously optimistic. While we may experience a slow-down in the small biopharma client segment due to the current condition of the financial markets, I believe that this impact may be offset by an increase in outsourcing levels from larger clients,” said Parexel chairman and CEO Josef von Rickenbach in a company release.

Earlier this month, funding difficulties caused the sponsor of a large clinical trial to pull out of a contract with Parexel, and the sponsor subsequently filed for bankruptcy protection. Parexel terminated its contract with the client and recorded $15 million in pre-tax reserves in the second quarter for anticipated wind-down costs and bad debt expense related to impaired accounts receivable.

Parexel's share prices were up 26% to $9.30 in morning trading.

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