Idexx Laboratoratories Inc, which provides diagnostic tests and information for livestock and poultry and tests for the quality and safety of water and milk, posted higher first-quarter earnings and raised financial guidance for the year.
The Westbrook-based company also announced changes to its product distribution strategy in a move to avoid litigation with the Federal Trade Commission. Under the revised plan, at least one of its three national distributors of veterinary products will sell rivals’ products as well.
Idexx said in 2010 that the FTC was looking at its marketing and pricing practices.
“We believe this revised distribution arrangement satisfies the FTC concerns as we understand them,” Idexx Chairman Jonathan Ayers said in a conference call with analysts. “We believe this plan makes a lot of sense for our business and our veterinary customers and also helps us to avoid litigation with the FTC.”
First-quarter net income totaled $40.7 million, or 72 cents a share, up from $36.6 million, or 62 cents a share, in the year-ago quarter. Revenue rose more than 10 percent to $322.7 million, compared with $292.7 million a year ago.
The revenue growth was driven by higher sales of laboratory diagnostic and consulting services in the companion animal, or pet group, which contributes the bulk of Idexx sales. Idexx said it added new customers due to geographical expansion. The company had lower sales in the livestock and poultry diagnostics sector due, in part, to lower sales of mad cow disease tests.
“Our 10 percent organic growth in the first quarter, in an economic environment that remains challenging, demonstrates the success of our strategy to bring innovative products and services to our veterinary and other customers, as well as strong commercial execution in markets around the world,” said Chairman and Chief Executive Jonathan Ayers.
For the full-year, the company expects revenues to be in the range of $1.31 billion to $1.32 billion. Earnings are expected to be in the range of $3.07 a share to $3.12 a share, up from previous guidance of $3.04 a share to $3.10 a share. The company cited a favorable change in foreign currency exchange rates for the improved outlook.
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