Beckman Coulter (BEC) reported earnings per share (EPS) of 63 cents in second-quarter 2010, down 33% from 94 cents in the second quarter of 2009. However, adjusting for certain special items, restructuring and the acquisition of Olympus Diagnostic, the company’s EPS came in at 84 cents, way below both the Zacks Consensus Estimate of $1.07 and 99 cents in the year-ago quarter.
Beckman reported revenues of $902 million, up 19.2% (up 17.9% at constant exchange rates or CER) from the year-ago quarter. However, revenues were lower than the Zacks Consensus Estimate of $930 million. Olympus contributed $116.6 million to total revenues. Although recurring revenues increased 17.5% year over year at CER, it would have grown at 3.2% excluding the impact of Olympus.
Beckman’s two segments, Clinical Diagnostics and Life Sciences, recorded revenues of $795.5 million (up 22.8% annually) and $106.5 million (down 2.1%), respectively. Within Clinical Diagnostics, the highest growth (52.6%) was recorded by Chemistry and Clinical automation ($333.9 million), followed by Immunoassay and Molecular Diagnostics (up 9.7% to $222.4 million), and Cellular Analysis (up 5.7% to $239.2 million).
In August 2009, Beckman acquired Olympus Diagnostics for approximately $780 million. The acquisition strengthened the company’s business in chemistry and automation, evident from the growth recorded by this segment.
On a geographic basis, all the markets recorded robust growth, the highest being Asia Pacific ($150.1 million) with an annualized growth rate of 45.9%. While Beckman derived 46% of its revenues from the U.S. market ($414.5 million), its growth was lowest at 10%. Europe with revenues of $199.2 million and Emerging Markets with $80.2 million of revenues recorded growth rates of 19.9% and 28.9%, respectively.
Beckman exited the second quarter with cash and cash equivalents of $268.5 million, down from $288.8 million at the end of December 2009. The company also repurchased 1.5 million shares, completing the 2010 share repurchase program.
Outlook
Beckman is currently witnessing headwinds in the form of quality issues in the U.S. market and lower demand in the life sciences and cellular business. Based on these factors, the company lowered its outlook for 2010. It expects revenues and adjusted EPS in the range of $3.65–$3.70 billion (previous guidance of $3.75–$3.85 billion) and $3.90–$4.00 ($4.30–$4.50), respectively. Moreover, recurring revenue growth, (excluding Olympus acquisition) in CER was brought down to 5% from the earlier projection of 6–8%. Olympus is expected to contribute $480–$500 million in 2010, unchanged from the earlier guidance.
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