Covance ($CVD) reported third-quarter net income of $37.8 million, a 7% drop from a year earlier, but enough to beat Street estimates.
The CRO pulled in $544.8 million in revenue in the quarter, up 0.3% from last year's $543.3 million, but that gain was negated by $20.7 million in costs related to restructuring and the wind-down of three facilities around the world. Still, Covance's earnings of 69 cents per share topped Wall Street predictions by two pennies, RTTNews reports.
Covance was bolstered by continued growth in its late-stage development unit, which grew 6.9% to bring in $324.1 million in revenue as its successful clinical development business compensated for slumping demand for Covance's market-access services.
The CRO's early development operations continued their slide, however, dropping 8.1% in Q3 to $220.7 million in revenue. Covance blames some of that decline to the aforementioned wind-down, and the company expects the unit to perform better as its cost-reduction efforts take effect.
Covance also increased its IT spending in the quarter and expanded its clinical development staff, efforts CEO Joe Herring said will help the company attract clients and close some pending deals in the fourth quarter. "Our performance this quarter demonstrates the leverage in our scalable business model when commercial success is combined with our lower cost infrastructure," Herring said in a statement.
Special Report: Deborah Tanner - Women in Biotech 2012