Covance Earnings: Here’s Why the Stock is Rising Now

Covance Inc. (NYSE:CVD) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 0.4%.

Covance Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 20% to $0.78 in the quarter versus EPS of $0.65 in the year-earlier quarter.

Revenue: Rose 10.08% to $644 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Covance Inc. reported adjusted EPS income of $0.78 per share. By that measure, the company beat the mean analyst estimate of $0.77. It beat the average revenue estimate of $586.12 million.

Quoting Management: “Accelerated revenue growth in central laboratories was the primary driver of better-than-expected consolidated results in the second quarter, including pro forma revenue growth of 10%, operating margin of 9.7%, and EPS growth of 20% to $0.78,” said Joe Herring, Chairman and Chief Executive Officer. “Strong commercial performance, led by clinical development, delivered record adjusted net orders of $776 million in the quarter. These orders result in an adjusted net book-to-bill of 1.31 to 1.”

Key Stats (on next page)…

Revenue increased 1.52% from $634.34 million in the previous quarter. EPS increased 4% from $0.75 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.77 to a profit $0.79. For the current year, the average estimate has moved up from a profit of $3.03 to a profit of $3.13 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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