Parexel dials down its 2015 expectations and takes the long view

Despite posting an uptick in revenue last quarter, CRO giant Parexel International ($PRXL) is slightly lowering its outlook for fiscal 2015, betting that its backlog of deals will eventually make up for some soft sales.

Parexel CEO Josef von Rickenbach

In the quarter ended Dec. 31--the second of Parexel's fiscal year--the company brought in $499.3 million in revenue, a 2.5% increase over the same period the prior year. Clinical research services accounted for $377.4 million of that total, growing nearly 4%, while its Parexel Informatics unit grew about 3% to $65.8 million and its consulting business dipped more than 5% to $56 million.

Now the CRO is expecting about $2 billion in fiscal 2015 revenue, a roughly 2% reduction from the $2.1 billion it forecast back in October.

"The current mix of business in our backlog has resulted in a continued disproportionate number of projects in the start-up stages," Parexel CEO Josef von Rickenbach said in a statement. "In combination with the adverse impact of recent foreign exchange movements on revenue, we expect these dynamics to have a dampening effect on our revenue projections in the short term, but then lead to rapid expansion as the backlog matures."

Parexel wrapped the calendar year with a $5.1 billion backlog, 6% larger than in 2013, adding $964.4 million in new business in the final three months.

- read the results (PDF)