Covance's sales soar on a jump in late-stage testing

Global CRO Covance ($CVD) boosted its revenue by about 11% last quarter, capping off a banner year in which the company outstripped its financial targets.

Covance cleared $623.1 million in revenue in the fourth quarter of 2012, above the prior year's $562.2 million, and increased its net income by 35% to $45.8 million. For the full year, the CRO posted $2.6 billion in sales, a 10% jump, and grew its profits by a whopping 89% to $179.2 million.

On a segment basis, Covance's late-stage development business again led the way, growing 15% to $394.8 million in the fourth quarter and increasing 17% to $1.5 billion for 2013. The slower-paced early-phase unit turned a strong quarter, growing 5% to $228.3 million, but annual revenue stayed about flat at $870.5 million.

Joe Herring--Courtesy of Covance

"In 2013, Covance continued to benefit from market share gains in central laboratories, strong operational delivery in clinical development, improving market conditions in toxicology and successful execution of our ongoing strategic IT projects," CEO Joe Herring said in a statement. "... In addition, we delivered strong orders throughout the year, resulting in record adjusted net orders of $3 billion and an adjusted net book-to-bill of 1.25 to 1 for the year."

For 2014, Covance is expecting revenue growth of between 6% and 10%, setting the high end at nearly $2.9 billion, driven by a continued expansion of its central lab, Phase IIb-IV and market access services.

Meanwhile, the CRO's steady restructuring of its early development business marches on, as Covance disclosed the sale of its high-complexity genomics laboratory in Seattle to LabCorp ($LH) last month, expecting to report "a small gain" when it unveils its first-quarter financials in May.

- read the results