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Thermo Fisher Records 12 Percent Increase in Q2 Revenues

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific today reported that its revenues for the second quarter grew 12 percent to $2.9 billion, a record for the quarter.

A year ago, the company posted $2.6 billion in revenues. Today's results beat Wall Street estimates of $2.84 billion.

During the quarter, the company closed on its $2.1 billion buy of Dionex, and on a conference call following the release of its earnings, Peter Wilver, Thermo Fisher's CFO, said that Dionex contributed a little more than 2 percentage points to the company's overall revenue growth for the three months ended July 2.

On a pro forma basis, treating Dionex as if it were part of Thermo Fisher during the second quarter of both 2011 and 2010, revenues increased 9 percent year over year, including a 4 percent increase from currency exchange and a 1 percent increase from purchases other than Dionex.

Thermo Fisher's Analytical Technologies division saw revenues climb to $1.28 billion, a 20 percent increase from $1.07 billion a year ago. Wilver said that the firm continued to see strong growth in clinical diagnostics, "specifically our biomarkers business," while its instruments business serving the industrial and applied markets also saw "strong" year-over-year growth.

The Laboratory Products and Services division grew 7 percent year over year to $1.76 billion from $1.65 billion a year ago, helped by the company' biopharmaceutical service business, which improved 10 percent year over year.

Thermo Fisher's equipment sales increased 5 percent year over year while consumables were flat due to a phasing out of the Biosite business, Wilver said. In late 2009, Alere, then called Inverness Medical Innovations, terminated a contract with Thermo Fisher for the resale of Alere's Biosite products.

During the recent American Society for Mass Spectrometry conference, the company introduced three new mass spectrometry systems. CEO Marc Casper said on the conference call that Thermo Fisher has received a "fantastic" response from customers on the new launches, and the company has received the largest number of demo requests for new products in memory.

"And that bodes well for a meaningful contribution of new products in the second half of the year," Casper said.

The firm's R&D spending reached $83.3 million during the second quarter, up 20 percent from $69.6 million a year ago. Its SG&A spending rose 17 percent to $665.6 million from $566.8 million a year ago.

Net income of $523.4 million, or $1.36 per share, for the quarter was up121 percent from $237.3 million, or $.57 per share, a year ago. Results for Q2 2011 include gains on the sales of discontinued operations, primarily Athena Diagnostics and Lancaster Laboratories, which increased EPS by $.79, the company said.

On a non-GAAP basis, EPS for the second quarter rose to $.99 from $.81 a year ago, beating analyst forecasts of $.98.

As of July 2, Thermo Fisher had $1.36 billion in cash and cash equivalents, it said.

For full-year 2011, Thermo Fisher raised its adjusted EPS guidance by $.03 to a new range of between $4.08 and $4.18, which would represent an 18 to 21 percent increase over $3.57 achieved in 2010. Revenue guidance was also raised by $80 million to a new range of $11.60 billion to $11.70 billion, due to a more favorable foreign exchange and recent acquisitions. This would represent a 10 percent to 11 percent increase over $10.79 billion in 2010.

Guidance does not include any potential impact from the pending $3.5 billion acquisition of Phadia. During the call Casper moved up the expected close of the deal to the end of the third quarter from an earlier prediction of a fourth-quarter close. The US Federal Trade Commission had cleared the acquisition and "we actually got our filings in a little faster than we expected," he said. Thermo Fisher is awaiting clearance from the European Union.

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