Psychemedics Corp. (NYSE:PMD) shares are down about 2 percent, paring earlier losses after the drug-testing firm turning in smaller fourth-quarter profits despite a 19.7 percent jump in Q4 revenues.
The Acton, Mass.-based diagnostics company generated $5.1 million in sales during the three months ended Dec. 31, 2010, topping the year-ago comparison by $845,000 and meeting the expectations of the lone analyst following the company, according to Zack’s. But the $681,000in Q4 profits was a different matter, coming in 29 percent below the $971,000 bottom-line result recorded during the closing months of 2009.
In prepared remarks, CEO Raymond Kubacki Jr. said 2010 revenue growth was supported by Psychemedics adding new clients, particularly in the United Kingdom and elsewhere in Europe, and by recent sales and marketing pacts. The company also is adding selected new hires, including more sale representatives, along with a new controller and a new director of sales and marketing, creating a “foundation for future revenue growth.”