Quintiles restores its rosy outlook after a big quarter

Quintiles CEO Tom Pike

Quintiles ($Q) is going back to its earlier optimism for 2015, scaling up its previously reduced growth projections after posting a strong sales quarter.

The CRO brought in $1.1 billion in the second quarter, a 3.8% increase over the same period last year and a 9.8% jump when accounting for the relative strength of the dollar. The total narrowly beat analysts' estimates, according to Zacks, and has put Quintiles back on track for the year.

After the first quarter, the company reduced its 2015 revenue guidance to account for some sluggish sales and mounting cancelations, but it is now up-sizing its start-of-the-year estimates, expecting constant-currency revenue growth of between 8.5% and 9.5%, a boost over the 7.5% to 9% it previously guided.

The company's banner product development business grew about 1% to $786.4 million on the quarter, and its smaller healthcare services segment grew 13.2% to $288 million. Quintiles' profits came in at about $85 million, virtually unchanged from the same period in 2014.

The turnaround, Quintiles said, is due in part to a spike in new business wins that have paved the way for the rest of the year.

"Our industry-leading position and advantages delivered a strong book-to-bill of 1.23 this quarter and $2.7 billion of new business in the first half of the year," Quintiles CEO Tom Pike said in a statement.

The company is also counting on a boost from Q2 solutions, a recently launched $575 million joint venture with Quest Diagnostics ($DGX) that pairs the CRO's experience running studies with the latter company's expertise in lab tests. Q2, which is 60% owned by Quintiles, should add about $80 million to second-half revenue, the company said, and result in between $40 million and $50 million in annual savings by 2018.

- read the results