ICON lowers earnings forecast

IRISH pharmaceutical services firm ICON has lowered its earnings per share forecast for this year, due to an anticipated rise in labour costs.

The Dublin-headquartered firm — which has its shares listed here and in the US — had guided towards full-year earnings per share of between $1.10 (€0.70) and $1.25 for 2011. However, it now expects that figure to be between 50c and 70c instead.

Icon’s chief executive Peter Gray said: “Significant work will be transitioned to Icon over the next two years as this partnership (the firm has been selected by Pfizer as a major international clinical development partner) develops, which should drive an acceleration in our growth over that time. We’re, thus, increasing our hiring drive and expect to add significant cost in the next two quarters as we gear up to handle work, which will be transferred to us in the fourth quarter of this year and throughout 2012.”

“As a result, while we’re not changing our revenue guidance for 2011, we are lowering our earnings per share guidance to 50c-70c, reflecting significantly increased costs in the third quarter without compensating revenue, followed by further cost growth in the fourth quarter with revenues beginning to build,” he added.

ICON’s second quarter figures show that the firm increased its net revenues by 4.2%, to $233m, in the three months to the end of June, on a year-on-year basis. First half revenues amounted to $462m; representing a 4.4% year-on-year jump. The firm is expecting its full year revenue to come in at somewhere between $945m and $980m.

Operating income, for the second quarter, was up by 6.7% at $15.5m and was up by 6.8% for the entire first half, to $31.5m. Earnings per share for the last quarter amounted to 21c, down from 38c for the same period last year.