Parexel International Corp. (NSDQ:PRXL) wrapped up its fiscal 2010 reporting a 19.4 percent increase in overall sales and adjusted net earnings of $19.1 million.
The 32-cent per share adjusted profit — which excludes just under $10 million for restructuring costs and other special charges during the three months ended June 30 — topped both Wall Street expectations and year-ago comparisons. The Waltham, Mass.-based clinical research organization also boosted its revenue guidance for the upcoming fiscal year by $20 million, up to a new range of between $1.27 billion to $1.31 billion.
Parexel likewise raised the bottom end of its 2011 earnings forecast by 2 cents per share, to $1.22, but is sticking with its previous top of $1.32 a share. Analysts, on average, are anticipating earnings of $1.27 a share on $1.27 billion in revenues next year.
Clinical research services still comprise about three-quarters of Parexel’s overall business, totaling $870.1 million during fiscal 2010. It also generated $121.6 million from consulting and medical communications work and $38.3 million from its Perceptive Informatics Inc. unit, which provides medical imaging and other information technology services. Growth within PII was particularly brisk, more than doubling 2009 revenues and nearly matching CRS growth dollar-for-dollar.
Perceptive Informatics also is fast becoming Parexel’s most lucrative business, producing gross margins of 46.8 percent during the fourth quarter — up from 10 percent a year ago.
In prepared remarks, CEO Josef von Rickenbach said the CRO industry continues to experience dramatic change, with potential clients taking a more strategic approach to outsourcing while engaging fewer providers. He said Parexel is working to adapt to that changing market, evidenced by the recent addition of new clients such as Bristol-Myers Squibb (NYSE:BMY), the New York-based biopharmaceutical giant which inked Parexel to a three-year pact in June to coordinate its global development pipeline. Parexel also has been expanding its branch network, particularly in China and elsewhere in that region, with 17 offices now located along the Pacific Rim.
That added focus on Asia is paying off in the pace of revenue growth, with 2010 sales for the region rising 39.4 percent over year-ago levels to $133.3 million. The rate of growth was considerably slower in Parexel’s more established markets, climbing 5.4 percent throughout the Americas over the past 12 months and 3.6 percent in Europe, Africa and the Middle East. But Europe and its environs remain the company’s largest money-maker, producing just under half of the company’s $1.13 billion in fiscal 2010 revenues.
Parexel said it picked up a total of $723.8 million in new business during the April-to-June quarter, less $78.8 million in cancellations and another $50.1 million to negative foreign currency exchange rates. Its year-ending backlog was $2.681 billion, up over $500 million from the end of fiscal 2009.