Lack Of Recovery In Toxicology Prompts CVD To Reduce Guidance Further

Analysts at William Blair & Co maintain their "outperform" rating on Covance Inc

, while reducing their estimates for the company. William Blair & Co says, “Second-quarter EPS of $0.49 were two cents above our estimate and in line with consensus; excluding 9 cents of restructuring costs, EPS were $0.58.” “Fiscal 2010 guidance was reduced to a range of $2.10 to $2.30 (down from $2.40 to $2.65) or $2.21 to $2.41 on a non-GAAP basis (excluding 11 cents in restructuring costs). The reduction was driven by lower early development profitability, headwinds from the stronger U.S. dollar, and lower late-stage revenues…. It appears that a lack of a recovery in toxicology (and perhaps deterioration) will further delay the company’s earnings recovery into 2011,” the analysts add. William Blair has lowered its 2010 EPS estimate by $0.23 on a GAAP basis to $2.20.