Covance slips after narrowing its 2014 ambitions

Covance's ($CVD) shares fell as much as 10% after the CRO ​missed its internal sales goals in the first quarter and dialed down its revenue projection for the year.

In the first quarter, the Princeton, NJ, company increased its net revenue by 7% to $620 million, falling short of Q4's $623 million, which Covance expected to beat. Late-stage development led the way on the quarter, growing 8% to $402 million, while early development ticked up 5% to $218 million. The CRO boosted its net income by about 6% to $50.8 million.

Those figures were a bit below Covance's expectations, and the company is narrowing its full-year revenue growth guidance to between 6% and 9%, down from the 6% to 10% range it forecast at the end of 2013. Covance is also inching back its expected earnings per share by 5 cents, now projecting between $3.70 and $3.95 for the year.

But despite the sales miss, the quarter also saw a jump in toxicology orders, CEO Joe Herring said, and, moving on from a reduction due to the sale of its Seattle genomics lab, Covance is running a backlog of $6.9 billion headed into the rest of the year.

"Adjusted net orders in the first quarter were $710 million, representing an adjusted net book-to-bill of 1.15 to 1," Herring said in a statement. "Net orders remained strong in central laboratories and grew significantly in toxicology and clinical pharmacology, offsetting lower-than-expected net orders in clinical development."

Separately, Covance has kicked off a broad rebranding effort, looking to better establish itself as an end-to-end provider of solutions rather than a simple contractor. "The old paradigm of using outsourcing as simply auxiliary arms and legs has given way to a more comprehensive, thoughtful approach," Herring said.

- read the full results
- get more on the rebranding