Covance Reports Positive 3Q04 Results

Covance Reports Positive 3Q04 Results

PRINCETON, N.J.Covance Inc.(NYSE:CVD) announced financial results for the third quarter of fiscal 2004ended Sept. 30 (3Q04).

Net sales for 3Q04 were $256.3 million, a 10.5 percentincrease over net sales of $232 million for the companys third quarter offiscal 2003 (3Q03). Gross profit and net income for 3Q04 were $36.1 million and$25.2 million, respectively, compared to gross profit of $29.8 million and netincome of $19.5 million for 3Q03. Net income for 3Q04 increased 29 percent to$25.2 million ($0.39 per diluted share) compared to $19.5 million ($0.31 perdiluted share) for 3Q03.

Chris Kuebler, chairman and chief executive officer, said, Duringthe quarter, revenue growth increased and our ongoing focus on productivityimprovement expanded operating margins to 14.1 percent. In addition, ourcontinued strong order performance led to backlog growth of 21 percentyear-on-year.

As is commonly the case, some service lines performed inexcess of our expectations and some others performed modestly below ourexpectations during the quarter. Our balanced portfolio of leading drugdevelopment services led us to grow earnings 26 percent and revenues 10.5percent over the prior year. Our 2004 earnings expectation continues to be atleast $1.51 per share. In addition, our focus on operational and serviceexcellence and our healthy backlog of orders lead us to target 2005 earnings pershare in the range of $1.81 to $1.86. This earnings expectation would representthe fifth consecutive year of earnings per share (EPS) growth of 20 percent orhigher.