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| Parexel CEO Josef von Rickenbach |
After a hiccup in new business alarmed investors and overshadowed steady gains, Parexel International ($PRXL) righted the ship in its second fiscal quarter, boosting its new contracts and growing revenue by about 15%.
Parexel's net new business wins totaled $654.7 million, a 66% sequential jump over the $394 million that startled investors last quarter. On the revenue side, the CRO hauled in $487.1 million, besting $422.1 million from the prior year period, and net income jumped 33% to $28.3 million on the quarter.
As usual, Parexel's clinical research services business led the way with $363.9 million in revenue, a 14% increase, while its consulting segment grew 12% to $55.5 million and Perceptive Informatics, its IT unit, leapt 30% to $67.7 million. That puts Parexel on track to meet its roughly $1.9 billion revenue expectation for the fiscal year, CEO Josef von Rickenbach said, thanks in part to the company's return to a healthy book-to-bill ratio of 1.34.
"I believe the market for our products and services continues to be strong," von Rickenbach said in a statement. "We remain focused on successfully competing in the marketplace, executing projects with high quality and driving efficiency initiatives throughout our businesses."
Parexel's shares climbed as high as $50 after its quarterly results came out, a roughly 28% jump from their December nadir when investors seemed to lose faith in the global giant's ability to keep up with rivals like Quintiles ($Q) and Covance ($CVD).
However, while Parexel's positive second quarter suggests its previous slump in contract signing was just a blip, the CRO is still likely to see that swoon's effects on revenue at some point down the line.
- read the results