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Thermo Fisher Posts 5 Percent Q3 Revenue Growth, Raises Guidance

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific today reported 5 percent revenue growth for the third quarter, with particularly strong growth coming from its Specialty Diagnostics segment, and raised its full-year top- and bottom-line guidance.

The Waltham, Mass.-based provider of labware, research products, and diagnostics reported total revenues of $3.09 billion for the three months ended Sept. 29, up from Q3 2011 revenues of $2.93 billion. It beat analysts' consensus estimate for revenues of $2.99 billion.

The firm's Analytical Technologies segment had a 1 percent increase in revenues year over year to $1.01 billion, while its Laboratory Products and Services segment posted 5 percent revenue growth to $1.51 billion, and its Specialty Diagnostics segment jumped 15 percent to $706.7 million.

Thermo Fisher said that on a pro forma basis, as if Phadia were owned for the entire third quarter of 2011, its organic revenue grew 4 percent. Currency translation lowered revenue by 3 percent and acquisitions, other than Phadia, increased revenue by 1 percent.

During the quarter, Thermo Fisher added to its diagnostics business with the $925 million acquisition of One Lambda, a maker of transplant diagnostics products.

"We had a good quarter in health care and diagnostics, which grew in the mid-single digits," Thermo Fisher President and CEO Marc Casper said on a conference call following the release of the results. "We had great momentum here and had strong sales across a number of our specialty diagnostics businesses including biomarkers."

He also said that mass spectrometry products, HPLC, and bioprocess production products did "really well" in the quarter.

"In academic and government end markets, conditions were basically the same as what we've been seeing all year, so our view here hasn't changed," Casper added. "Our customers are dealing with the weaker funding environment, and spending on capital equipment continues to be constrained while sales of laboratory consumables have been less affected. We benefited this quarter from an easy comparison, so we actually grew in the low-single digits for the quarter."

He said the firm's sales grew in the high-single digits among pharma and biotech customers.

The firm posted net income of $290.4 million, or $.79 per share, compared to $265.4 million, or $.69 per share, for the third quarter of 2011. On an adjusted basis, its EPS was $1.19, beating the consensus Wall Street estimate of $1.16.

Thermo Fisher's R&D spending for the quarter increased 6 percent to $92 million from $86.8 million, and its SG&A spending increased around 4 percent to $707.8 million from $677.4 million. It also reported amortization of acquisition-related intangible assets of $186.2 million versus $174.6 million in Q3 2011, and restructuring costs of $15.2 million, up from $11.6 million.

Thermo Fisher finished the quarter with $832.2 million in cash and cash equivalents and $4.3 million in short-term investments.

The firm also noted that it repurchased $400 million of its stock during Q3.

As a result of its performance this year, along with the acquisition of One Lambda and a "slightly improved" foreign currency exchange, Thermo Fisher raised its top- and bottom-line guidance for full-year 2012. The firm now expects revenues to fall between $12.32 billion and $12.40 billion, with adjusted EPS of $4.81 to $4.88.

In Wednesday morning trade on the Nasdaq shares of Thermo Fisher were up nearly 4 percent at $59.65.

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