Shares in the clinical trials firm Icon fell 6 per cent yesterday as the firm lowered its earnings expectations for 2005.
The firm blamed problems at one of its research laboratories for a 16 per cent fall in income from its operations in the second quarter of fiscal 2005 compared to the same period a year earlier.
Income from operations fell to $7 million (€5.3 million) in the second quarter, down from $8.4 million in the same quarter of 2004. Net income also fell slightly to $5.8 million in the second quarter 2005 from $6.3 million in 2004.
Dr John Climax, Icon's chairman, said the quarter was the first in over five years in which Icon's earnings declined, but it was in line with its expectations due to the high level of order cancellations in the previous quarter. He said Icon was revising its earnings expectations for fiscal 2005 to $1.68-$1.70.
Icon management blamed the poor performance of its research laboratory for the poor set of results. Changes in technology at the laboratory and changes in the mix of business conducted in it were the principal cause of the disappointing results, they said.
Mr Peter Gray, Icon chief executive, told analysts the firm would again look at its cost base following an earlier restructuring about a year ago.
Icon, which conducts clinical trials and tests for client companies, generated $117 million revenue in the three months to the end of November 2004, up from the $113.2 million in the same period during 2003. Net earnings per share fell to 42 cents, down from 46 cents a year earlier.
Capital spending in the second quarter 2005 was $2.9 million and year to date was $7.5 million.
Icon employs 2,600 staff and provides services to the pharmaceutical, biotech and medical device industries from 37 locations in 23 countries worldwide.
Shares in Icon, which is traded mainly on the Nasdaq, fell 6 per cent on news of the revised earnings forecasts, but recovered to close down 3.45 per cent at $35.
