Covance ($CVD) posted a strong revenue performance in the second quarter thanks to better-than-expected results from its early-stage development segment, but the CRO is inching back its full-year expectations to account for some outgoing assets.
The company netted $639 million on the quarter, an 8.1% jump over the same period last year. Covance's early-stage business grew 7.7% to $231.2 million due to an unexpected increase in demand for toxicology and pharmaceutical chemistry services, the CRO said, while its late-phase segment ticked up 8.1% to $408.3 million on strong sales for central laboratories that made up for a slump in clinical development.
But a spike in costs and expenses curtailed Covance's profits, which fell nearly 60% to $16.9 million on the quarter. The company reported a $52.6 million non-cash charge related to the closure of an animal testing facility in Arizona and another $4.2 million bill tied to ongoing restructuring.
Now Covance is slightly dimming its expectations for the year, reducing its best-case revenue scenario by about $30 million to roughly $2.8 billion, or 8% annual growth.
But the CRO believes it's quarterly commercial performance is paving the way for a strong year. Covance reported net orders of $773 million in the second quarter, an 8.9% sequential increase that makes for a 1.21 book-to-bill ratio, the company said.
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