Icon upbeat for 2017 despite missing revenue targets

Icon shares recovered from an early decline yesterday as the Irish clinical research and drug development services firm met fourth- quarter earnings targets, but narrowly came up short on revenue estimates.

The company’s shares are listed on Nasdaq. It saw its shares slip by just under 1% on the back of announcing its annual results for 2016. A net profit of $74.3m (€69.8m) was reported for the final three months of last year — representing a 17.1% increase on the same period last year.

The fourth-quarter earnings were in line with Wall Street analysts expectations, but revenues for the period — showing a near 8% year-on-year rise to $435.1m — narrowly missed expectations for sales of $441m.

For the full year, Icon’s revenues increased 5.8% to just under $1.67bn, while net earnings were up by 12.4% to $269.3m. Icon’s share price has been strong of late. It is up 14% since the turn of the year and ahead by 25% over the past year. It was in marginal growth mode in afternoon trading yesterday.

Management has reiterated its full-year 2017 revenue guidance of $1.7bn to $1.75bn and earnings per share of $5-to-$5.20; representing growth rates of 2% to 5% and 4.8% to 9%. Speaking on the back of yesterday’s results, Icon’s chief executive Ciaran Murray said 2016 had been a good year for the company and that management is expecting further revenue and earnings growth this year.

“We grew our backlog by 8% year-on-year to $4.2bn, constant currency revenues increased by 6.4% and we exited 2016 with an operating margin of 19.5%. This enabled us to grow earnings per share by 19.8% year-on-year to $4.77.

"We expect 2017 to be another year of revenue and earnings growth as we continue to build and diversify our customer base,” he said.

Among Icon’s off-balance sheet highlights last year were the acquisition of US firm ClinicalRM, which extends its presence in the market for government-sponsored research into vaccines and infectious diseases; a renewal of its contract to carry out clinical trails for Pfizer and being selected by Genomics England to support the world’s largest genome sequencing programme for cancer and rare diseases.