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"In the first quarter, we delivered strong revenue growth of 15.1% and arecord operating margin performance," said Joe Herring, Chairman and ChiefExecutive Officer. "Early Development segment revenues grew 12.7% andoperating margins increased both year-on-year and sequentially to 25.0%.Toxicology room renovations in North America are progressing as scheduled andadditional capacity will come online in the second quarter. In Late-StageDevelopment, revenue growth was strong at 17.5% and operating margins expandedmore than 200 basis points year-on-year and sequentially to 18.5%. Inparticular, we were pleased with the very strong revenue growth in centrallabs of more than 30%.
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"First quarter net orders of $469 million were solid, although notindicative of the robust business environment we are currently experiencing.As an example, early in the second quarter, we were awarded a three-year,dedicated capacity toxicology agreement with a minimum contract commitment of$66 million. We were also selected as the primary provider of clinicaldevelopment services by a top-ten pharmaceutical company and we expectsignificant 2008 orders from this agreement. Beyond these examples, ourpipeline of opportunities is larger and more strategic than at any time incompany history. Some of these opportunities are unprecedented in scope,combining multiple service lines in both our Early and Late-Stage Developmentsegments. Our broad-based portfolio of services uniquely positions us to workwith these clients to accelerate drug development timelines and make theircost structures more flexible. These favorable market conditions also give usincreased confidence in our ability to deliver low- to mid-teens revenuegrowth and a 20% annual growth in EPS to $3.18 per diluted share in 2008,excluding the gain on sale from both periods."
The Company's Early Development segment includes preclinical toxicology,analytical chemistry, clinical pharmacology services, and research products.Early Development net revenues for the first quarter of 2008 grew 12.7% year-over-year to $202.0 million, compared to $179.2 million in the first quarterof 2007 and $207.9 million last quarter. Year-over-year revenue growth was ledby toxicology and chemistry services. The sequential $5.8 million decline inrevenue is attributable to a soft quarter in clinical pharmacology (as somestudies slipped out of the first quarter), the negative impact of foreignexchange (from a decline of the British pound against the US dollar), andcapacity constraints in North America toxicology (as rooms were taken off-linefor renovation). We expect strong sequential revenue growth in the secondquarter as new toxicology capacity is brought online in Madison, Wisconsin andas volume increases in clinical pharmacology.
Operating income for the first quarter of 2008 increased 15.8% to $50.6million, compared to $43.7 million for the first quarter of last year.Operating margins for the first quarter of 2008 increased to 25.0% from 24.4%in the first quarter of 2007 and 24.8% last quarter. We expect expansion inEarly Development operating margin in 2008 on a full-year basis.
The Late-Stage Development segment includes central laboratory,Phase II-III clinical development, and commercialization services(periapproval services and market access services). Late-Stage Developmentnet revenues for the first quarter of 2008 grew a strong 17.5% to $210.4million compared to $179.1 million in the first quarter of 2007. Excluding theimpact of the sale of our ECG business, whi
