NEW YORK (TheStreet) -- Profit at PerkinElmer (PKI) - Get PerkinElmer, Inc. Report more than doubled in the second quarter despite the slowing economy. Moreover, the technology and laboratory research provider's CEO, Robert Friel, remains optimistic about the rest of the year even while many of his peers in the corner office have been offering cautious comments to Wall Street analysts.
Friel spoke with
about why he remains positive about his business and where he sees the most growth at his company.
What are your expectations for the rest of the year as well as 2011?
We continue to be bullish as far as our prospects for the second half of the year. We are forecasting organic growth in the high single digits. And we think we will continue to do that in 2011. And, correspondingly, strong bottom line growth as well.
Your environmental health division was especially strong. What's driving that?
What's happening is that people want to source globally, whether it's food or consumer products. Unfortunately, we don't have global regulatory standards, so increasingly that's putting risk on consumers and also putting risk on the companies that import them. And so they are looking for tools from PerkinElmer to help reduce that risk and monitor for contaminations whether it's in food, consumer products or air or water.
How is your diagnostics business doing and how will health care reform affect it?
Diagnostics is a very attractive space because when you think about the cost of health care, one of the things we have to do is create tools for more accurate and earlier diagnosis of disease, really moving from curing to preventing. And that's what we do. We provide tests for people to detect disease early. I think Obamacare helps it due to the fact that it adds some 31 million people to get access to health care. So I think it improves the prospects because it increases the amount of people that will be looking for diagnostic testing.
You recently sold your illumination division for $500 million. Why did you do it and what are you going to do with the money?
It's a good business. However, when you think about PerkinElmer, with over $2 billion in revenue, it's a nice size from the standpoint of having scale, but also from the standpoint of being nimble. We want to be focused. The illumination-detection business was a little bit out of our core area of focus in human or environmental health. So we are going to take the proceeds and redeploy them back into the more attractive areas we see in human and environmental health.
Obviously there is a lot of growth in China. What is PerkinElmer doing in China?
We have been investing in China quite significantly. We made an acquisition there -- Sym-Biosciences -- in addition to adding employees in China because we see it as a significant opportunity to expand. If you look at Chinese spending on health care, it was about 5% in 2007, projected to be 10% in 2011. They are going to be spending some $175 billion over the next couple years on health care. So we want to be there, and we have been investing significantly.
What is the biggest threat to your business?
I think it's the global economic situation. Our view is that it's stabilizing, but it's something to keep an eye on. Also, at the end of the day, when you are a technology company, it's really about the people -- being able to retain and motivate the key leaders in the organization. And that's what we really spend a lot of time worrying about ... making sure we've got the right people and we are giving them the appropriate training in order to retain them.
Reported by Gregg Greenberg in New York
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