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Thermo Fisher Scientific Posts 6 Percent Revenue Growth

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific today reported 6 percent revenue growth to $2.68 billion for the third quarter ended Oct. 2, up from $2.53 in revenues for the third quarter of 2009 and above analysts' consensus estimate of $2.58 billion.

The Analytical Technologies Segment posted revenues of $1.16 billion for the quarter, a 14 percent jump from $1.02 billion in the year-ago period. Analytical instruments and the company's clinical diagnostics business saw strong growth over 2009 and helped to offset weaker results in the microbiology business due to a difficult year-ago comparison because of the weak flu season this quarter, company officials said during a conference call after the earnings release.

In the largest business in the segment, scientific instruments, the company saw "great strength in spectroscopy tools and mass spectrometry. Industrial customers are spending more money on instrumentation right now," said Marc Casper, president and CEO of Thermo Fisher.

Thermo Fisher CFO Pete Wilver added that sales of instruments and equipment grew in the high single digits.

The company's Laboratory Products and Services Segment inched up 1 percent to $1.65 billion, compared to $1.63 billion a year ago.

The firm's net income for the quarter rose 21 percent to $268.5 million, or $0.66 per share, in the quarter from $221.2 million, $0.53 per share, in Q3 2009. EPS on an adjusted basis was $0.90, compared to $0.78 a year ago. Wall Street had EPS estimates of $0.83.

Thermo Fisher also raised its full-year 2010 EPS and revenue guidance. The company now anticipates EPS to fall between $3.47 and $3.53, a 14 to 16 percent increase over 2009 figures. Revenue is expected to fall between $10.72 billion and $10.8 billion, which would represent a 6 to 7 percent improvement from 2009.

Thermo Fisher had previously given guidance of $3.40 to $3.50 on EPS and $10.6 billion and $10.75 billion on revenue.

Organic growth for 2010 is anticipated to fall between 5 and 6 percent, compared to full-year 2009, Wilver said during the call. Organic growth for the fourth quarter is expected to shrink 3 percent to 4 percent compared to a year ago.

Reporting on its end markets, Casper said that the outlook is positive across the board. In pharmaceutical/biotech, Thermo Fisher continues to grow its market share. In the third quarter, the company had "really strong" performance in the bioprocess production business "where our single use technologies and media are really benefitting from the trend of biologically based drugs."

The company also sees good momentum in the academic and government segment in its biosciences business, he said, and during the quarter, Thermo Fisher received $15 million in stimulus funding-related sales. In the industrial and applied markets, "we're definitely seeing the impact of the improving economy across our businesses," Casper said

And in healthcare, he reported "great momentum in clinical diagnostics."

During the quarter, Thermo Fisher spent $71.9 million on R&D, a 19 percent increase from $60.5 million a year ago. Its SG&A costs rose about 9 percent to $591 million from $544.5 million.

As of Oct. 2, the company had $930.2 million in cash and cash equivalents, it said.

In early Wednesday trade on the New York Stock Exchange, shares of Thermo Fisher were up 2 percent at $51.54.

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