Record gross new-business wins worth US$485 million cast a favourable light on a relatively subdued first-quarter performance by ICON, the global provider of outsourced development services based in Ireland.

Operating income for the quarter was US$11.7 million, 6.4% more than in the same period of 2011. However, the year-before figure included US$5.0 million in restructuring costs, without which ICON’s operating income for the latest quarter would have been down by 26.9%.

Stripping out the restructuring charge, ICON’s operating margin was 4.6% for Q1 2012 and 7.0% (4.8% including the non-recurring item) for Q1 2011. First-quarter net revenues for this year were US$252.3 million, up by 9.1% on Q1 2011 but just below the reported analyst consensus of US$256 million cited by Thomson Reuters.

Earnings per share (EPS) of US$0.15 were in line with analysts’ forecasts and topped the EPS figure of US$0.14 reported in the first quarter of 2011. If the restructuring charges were removed from last year’s EPS, though, they would have come to US$0.21.

Revenue distribution

ICON’s top 25 and top 10 clients accounted for 77% and 59% respectively of total revenues in the latest quarter, compared with 69% and 52% across the whole of 2011.

Geographically, revenues in the year to date have been more concentrated in established markets than in 2011.

In the latest quarter, 45.6% of all revenues came from EMEA countries, 42.7% from the US and 11.7% from Asia Pacific/Latin America. For the whole of 2011, 46.2% of revenues were generated in EMEA countries, 41.6% in the US and 12.1% in Asia Pacific/Latin America.

During the first quarter, ICON invested US$48.6 million on the acquisitions of Beijing Wits Medical Consulting in China and of value-strategy consultants PriceSpective in the US. The company also spent US$1.4 million on a stock-repurchase programme.

As a result, net cash amounted to US$186.0 million as of 31 March 2012, compared with US$174.2 million at the end of last year.  

New business wins

The gross new business wins of US$485 million for Q1 2012 translated into net awards of US$385 million and a net book-to-bill ratio of 1.53 against 1.12 a year earlier. Backlog for the first quarter was nearly US$2.4 billion versus just over US$1.9 billion in Q1 2011.