Friday, IDEXX Laboratories Inc. (IDXX), a manufacturer and distributor of products for veterinary, and food and water testing markets, reported a decline in earnings for the second quarter, largely due to the absence of gains recorded in the prior year period. The Westbrook, Maine headquartered company also lifted its forecast for fiscal 2009.
Net income for the quarter declined to $33.67 million from $39.36 million in the corresponding period last year. Earnings per share was $0.55, down from $0.63 in the same period last year, yet came in above the $0.52 per share projected by six analysts polled by Thomson Reuters. Analysts estimates typically exclude special items.
Pharmaceutical revenues and related earnings in the second quarter of 2008 were exceptionally high due to the sale of the remaining inventory of PZI VET in connection with the discontinuation of that product, the company said.
Excluding sales of pharmaceutical products that were subsequently divested or discontinued in 2008, earnings per share in the second quarter of 2008 would have been $0.54, up 2% from the prior year.
Revenue for the quarter declined to $265.7 million from $280.6 million in the year-ago quarter. Six Street analysts expected the company to report revenues of $252.89 million for the quarter. Organic revenue growth was 5% and impact of changes in currency exchange rates, reduced revenue growth by approximately 5%.
Companion Animal Group revenue declined to $217.3 million from $230 million in the corresponding period last year, due primarily to the absence of pharmaceutical product sales in the second quarter of 2009 and the unfavorable impact of changes in foreign currency exchange rates. Organic growth of 5% was largely the result of increased sales of IDEXX VetLab instruments and consumables, driven by sales of our Catalyst Dx chemistry analyzer and SNAPshot Dx analyzer.
Water segment revenues declined to $19.2 million from $20.2 million in the year-ago quarter due primarily to the unfavorable impact of changes in foreign currency exchange rates, which reduced reported revenue by 7%. Organic growth of 2% was due to the favorable impact of higher average unit sales prices partly offset by lower sales volumes.
Production Animal Segment revenues decreased to $19.6 million from $21.5 million in the same period last year, due primarily to the unfavorable impact of changes in foreign currency exchange rates, which reduced reported revenue by 10%.
For the six-month period, net income declined to $59.74 million or $0.98 per share from $66.92 million or $1.06 per share in the year-ago period. Revenue declined to $502.2 million from $529.6 million in the same period last year.
Looking ahead, the company lifted its 2009 revenue estimate to approximately $1.02 billion from the previous guidance of approximately $1.0 billion provided in April 2009. Revenues are expected to be benefited by weaker U.S. Dollar relative to other major currencies since April. Organic revenue growth of 5% is unchanged from its previous guidance.
Earnings per share for 2009 are expected to be in the range of $1.88 to $1.92, an increase from prior guidance of $1.86 to $1.90 per share due principally to the anticipated currency benefits. Free cash flow is expected to be approximately 100% of net income
Street analysts currently expect the company to earn $1.86 per share on revenues of $992.28 million for fiscal 2009.
IDXX closed Thursday's regular trading session at $47.99.
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