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IMS Health Reports Quarterly Low
In the US, pharma research firm IMS Health has reported poor third-quarter earnings and reduced its 2007 profit outlook - initially sending shares plummeting 22% to $22.99.
Net income on a GAAP basis slid 18% to $57.1m, compared with $69.3m in the same quarter a year earlier. Operating income in the third quarter of 2007 was $117.1m, up 1% on both a reported and constant-dollar basis, compared with $115.4m in the year-earlier period.
As a result, the company has scaled back its full-year guidance and now expects to post 2007 profits of just $1.52 to $1.56 a share - below the projected $1.59.
Earnings per share for the first nine months of 2007 and 2006 included net tax benefits and foreign exchange hedge gains and losses, while the second quarter of 2006 included income and expenses related to the terminated merger with Nielsen (then VNU - www.mrweb.com/drno/news4843.htm ).
During the third quarter, two million shares were repurchased at a total cost of $59.2m, bringing the total shares repurchased in the first nine months of 2007 to 13.2 million shares at a total cost of $392.8m. There remain approximately 3.3m shares available to repurchase under the current Board of Directors' authorisation.
Although the firm posted a strong revenue increase of 12% to $534m from a year ago (8% on a constant-dollar basis), this has mainly been driven by the company's consulting services. In a statement, CEO David Carlucci commented on this area of the business by saying: 'In an increasingly demanding health-care environment, momentum in our consulting business was very strong as clients continue to recognise the value of our strategic recommendations and industry perspective.'
Carlucci remains optimistic, adding that the Q3 results reflect solid gains in the US operations and more moderate growth in Europe.
IMS Health has a presence in more than 100 countries and claims to list every major pharmaceutical and biotech company in the world among its clients. Web site: www.imshealth.com.
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