Now please turn to Slide 6 to discuss segment results. In Early Development, in the fourth quarter, net revenues were $24 million or 6.3% increase year-on-year, net of a minor 10 basis points headwind from foreign exchange. While we experienced year-over-year growth in most service areas, the leading drivers of the increase were robust growth in our Clinical Pharmacology services and the inclusion of our full quarter results from our Alnwick, U.K., Portugal -- Alnwick, U.K, and Portugal, France sites in the quarter compared to only 2 months of operations in 2010.

Sequentially, revenues declined $5.7 million, with FX accounting for 40% of the decline. Strong sequential growth in Discovery Support Services was more than offset by a sharp decline in Research Product revenues, and to a lesser extent, a decline in our legacy European Toxicology services. North American Toxicology services were flat sequentially.

Fourth quarter GAAP operating income was $17.7 million, while pro-forma operating income was $32.6 million, or 13.9% of net revenue. This compares with 14.6% last quarter.

In our third quarter earnings call, we said that we expected operating margins in Early Development to expand in the fourth quarter. However, the sharp decline in revenue for Research Products broke [ph] an unexpected operating loss on both the GAAP and pro-forma basis in the quarter, and that was the primary factor causing the miss of the expectations this quarter.

Now turning to Late-Stage Development. Net revenues in the fourth quarter were $298 million which is up 10% from the fourth quarter of last year, or 8.1% excluding foreign exchange. Year-on-year growth was led by the continued very strong performance of our Clinical Development services and solid growth in our market access services, which offset a decline in Central Lab revenue.

Read the rest of this transcript for free on

If you liked this article you might like

Strong And Under The Radar Today: Covance (CVD)

Covance (CVD) Hits New Lifetime High

Covance (CVD) Hits New Lifetime High Today

Covance (CVD) Highlighted As Strong And Under The Radar Stock Of The Day

Watch Out: Barbarians At The Gate For Covance (CVD)