Earnings Preview: ICON plc (NASDAQ: ICLR) Third Quarter 2010
Monday, October 11, 2010 11:49 AM

ICON plc (NASDAQ: ICLR) is scheduled to release its fiscal third-quarter financial results before the opening bell on Thursday, October 21, 2010. Analysts, on average, expect the company to report earnings of 37 cents per share on revenue of $225.45 million. In the year ago quarter, the company reported earnings of 40 cents per share on revenue of $220.36 million.

ICON plc, a contract research organization, provides outsourced development services to the pharmaceutical, biotechnology, and medical device industries primarily in the United States, Ireland, and rest of Europe.  It specializes in strategic development, management, and analysis of programs that support clinical development from compound selection to Phase I to IV clinical studies. The company currently operates from 71 locations in 39 countries.

In the preceding second quarter, the Dublin, Ireland-based company's net income was $22.87 million, or 38 cents per share, compared to $22.76 million, or 38 cents per share, in the year-earlier quarter. Revenue grew to 2% to $223.75 million from $220.00 million in the same quarter last year. On a constant currency basis, revenue increased by 3.1%. Analysts, on average, expected the company to report earnings of 37 cents per share on revenue of $224.05 million.

Days sales outstanding, comprising accounts receivable and unbilled revenue less payments on account, were 30 days at June 30, 2010, compared to 33 days at December 31, 2009. For the quarter ended June 30, 2010, cash provided from operating activities was $35 million and capital expenditure was $7.5 million. As a result, the company's net cash, amounted to $221 million at June 30, 2010, compared to net cash of $194 million at December 31, 2009.

In February, the company issued revenue guidance for 2010 in the range of $890 to $940 million and EPS guidance in the range of $1.44 to $1.60. However, at its last earnings call in July, the company said that it now expects fiscal 2010 revenue to be at the lower end of its previous guidance range.

The company has benefited from a rebound in R&D spending and a recovery in clinical outsourcing industry. Big pharmaceutical companies have been increasingly establishing relationships with contract-research firms like ICON plc. In July, Icon Plc announced the official opening of a purpose-built clinical pharmacology unit within the Central Manchester University Hospitals Foundation Trust campus in Manchester, UK. The company recently announced that its hospital-based Clinical Pharmacology Unit in Manchester, UK achieved Supplementary Accreditation from the Medicines and Healthcare products Regulatory Agency. Supplementary Accreditation is the highest level of accreditation in Europe. This designation permits ICON to carry out all Phase I trials including First in Human (FIH) trials requiring review from the EAG (Expert Advisory Group).

In terms of stock performance, ICON plc shares have lost more than 2 percent since the beginning of the year.
Disclosure: Author doesn't own any of the stocks discussed here.


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