PRINCETON, N.J., July 28 /PRNewswire-FirstCall/ -- Covance Inc. (NYSE: CVD) today reported earnings per diluted share for its second quarter ended June 30, 2010 of $0.49, including $0.09 of facility rationalization and other cost reduction actions during the second quarter, versus $0.60 in the first quarter of 2010 and $0.67 in the second quarter of 2009.
 

"On a consolidated basis, second quarter net revenues grew 2.0% year-on-year and operating margin was 8.9%. Operating margins, excluding the second quarter cost reduction actions of $7.7 million, was 10.6% in the quarter," said Joe Herring, Chairman and Chief Executive Officer. "In Early Development, revenues grew 4.2% year-on-year and increased sequentially by $3 million. Early Development operating margin was 10.8% or 14.0% excluding the second quarter cost actions, a 280 basis point sequential increase. In Late-Stage Development, revenues were flat year-on-year due to the previously announced delay of three large Phase III clinical studies and operating margin of 21.2% met our forecast. Of these previously delayed studies, one trial commenced in the second quarter, one was reduced in size and launched in July, and the third is still expected to begin enrollment in 2011. In central laboratory services, revenue and operating income increased sequentially on increased volume, despite a continued shift in mix to more automated tests and to kits received from geographies where transportation expense and related revenue are lower.
 

"On the commercial front, adjusted net orders (inclusive of the previously mentioned reduced study and other cancellations) in the second quarter were $590 million, representing an adjusted book-to-bill ratio of 1.24 to 1 and a 14% increase over the second quarter of 2009. On a trailing twelve month basis, our Late-Stage Development adjusted book-to-bill was 1.3 to 1. With regard to building new strategic relationships, we are continuing to advance discussions with several large clients.
 

"While we were pleased with the second quarter improvement in early development revenues and profitability, our most recent forecast for the third quarter indicates sequentially flat revenue for the segment, with lower demand and profitability for our toxicology services and research products. In Late-Stage Development, we now expect central laboratory results in the third quarter to be roughly in-line with second quarter levels with similar kit volumes, due to typical seasonal patterns, and the continued impact of mix. As a result, we now expect earnings per share to be approximately $0.50 in the third quarter of 2010, including approximately $0.02 of costs related to previously announced site closures. For the full-year, we are lowering our 2010 revenue growth target to the 2% to 4% range and our earnings per share target to $2.10 to $2.30 (using June 30, 2010 exchange rates), including $0.11 per share in costs resulting from facility rationalizations and other cost reduction actions and excluding benefits from any potential strategic transactions. Our current earnings forecast is above the midpoint of this range."