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February 19, 2018 Biz Money

With strong 2017 behind it, IDEXX raises guidance for this year

IDEXX Laboratories Inc. (NASDAQ: IDXX), Maine's largest publicly traded company, raised revenue and earnings projections for 2018 after reporting fourth-quarter results that beat market expectations.

The Westbrook-based maker of diagnostic tests for pets, poultry and livestock on Feb. 1 boosted its 2018 revenue outlook by $65 million to a range of $2.205 billion to $2.245 billion, or reported growth of 12% to 14%.

It said the updated outlook includes an estimated $10 million of revenue benefit from implementing a new federal accounting measure relating to revenue from customer contracts.

The company, which also makes quality and safety tests for water and milk, also raised its 2018 earnings outlook to $4.04 to $4.18 a share, from the previous range of $3.50 to $3.62.

“The outlook for the year ahead looks exceptional,” said Jonathan Ayers, the company's chairman and CEO, in a statement highlighting continued strong growth in the firm's Companion Animal Group division and a new kidney-test innovation for pets launched in North America on Jan. 16. He added that the company plans to up investments in software data, and related innovation.

In a conference call that same day with analysts, Ayers underscored that “this is a long-term enduring growth business.”

IDEXX shares 'on a mission'

Shares were trading at $174.58 on Feb. 12, giving it a market capitalization of around $15.2 billion. Shares are up about 12% so far this year, which compares to a 1% decline in the S&P 500 benchmark index.

The Street's Jim Cramer on Feb. 1 cited IDEXX among a handful of stocks “on a mission,” noting that it “has been making a beeline to $200.”

IDEXX posted fourth-quarter revenues of $506 million, up 14% year-on-year and 3.1% above the Zacks consensus estimate of $491 million. Earnings per share were 43 cents in the fourth quarter, a 26% drop from the previous year amid a one-time negative impact of U.S. tax reform.

In part, fourth-quarter sales benefited from a 2% favorable foreign exchange impact. The CAG division saw 14% revenue growth, while livestock, poultry and dairy revenues were up 13% and water revenue was up 19%.

IDEXX employs more than 7,000 people worldwide, nearly 2,500 of whom are based in Westbrook. It has customers in over 175 countries.

On the same day as it put out earnings, IDEXX announced plans to share the benefits of federal tax reform with employees by paying more into their retirement plans.

For every dollar a 401(k) participant contributes, the company will match that amount dollar-for-dollar up to 5% of an employee's salary.

“IDEXX strives to create long-term value for our employees, customers and shareholders, and we believe in providing benefits to our employees that allow them to invest in their future,” said Giovani Twigge, chief human resources officer.

The news comes as IDEXX prepares for an expansion of its Westbrook campus, which includes a wellness center and common areas designed for collaboration.

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