ICON Trims Revenue Outlook, Boosts Profits
Dublin, Ireland-based ICON increased its 2008 earnings per diluted share (EPS) range to $1.27 to $1.29, up from the prior guidance of $1.23 to $1.26, an increase that was driven by improving margins, according to ICON CEO Peter Gray in an investor conference call last week. This EPS increase, however, comes with a reduction in ICON’s 2008 revenue guidance.
“For 2008 overall, we expect to report revenues in the range of $862 to $865 million, which is a modest reduction in previous guidance reflecting the impact of currency volatility over the last six months,” Gray said.
In July, ICON’s revenue for 2008 was estimated to be in the range of $870 to $890 million. For 2009, the CRO expects revenues to be in the range of $930 million to $980 million, representing 8% to 13% growth over 2008. Gray told investors that ICON’s 2009 profit margin is expected to be in the range of 12% to 12.5%—up from 11.5% to 11.8% in— 2008, “assuming a more stable currency.”
Elsewhere in the industry, global CRO Kendle lowered its full-year 2008 guidance last week, citing the negative effects of foreign exchange rates, and Waltham, Mass.-based Parexel announced that an unexpected contract termination and related bad debt will reduce its consolidated service revenue for the second half of its 2009 fiscal year by $6 million.
Following ICON’s investor conference call, ICON’s shares rose 6.2% to $22.53, but shares went down with the rest of the stock market to $21.45 at week’s end.
ICON also announced the completion of its acquisition of the remaining 30% stake in Beacon Bioscience, a medical imaging CRO in which ICON purchased a 70% stake in July 2004. Beacon changed its name to ICON Medical Imaging in 2007.
“ICON Medical Imaging has become a leader in its field,” Gray said in a company statement. “We believe that now is the right time to complete the acquisition of the remaining stake in the business.”
In 2008, ICON opened up six global offices, completed three acquisitions, including Beacon, and opened a new central lab in India.
“It’s been an active year for us in terms of strategically developing the organization,” Gray told investors.