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Thermo Fisher's Q1 Revenues Rise 14 Percent; 2012 Revenue, EPS Guidance Raised

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific today reported 14 percent growth in revenues year over year for the first quarter as the Analytical Technologies and Specialty Diagnostics segments each grew more than 20 percent.

For the period ended March 31, total revenues rose to $3.10 billion from $2.72 billion, besting Wall Street estimates of $2.98 billion.

Contributing to that increase were the acquisitions of Dionex and Phadia, and on a pro forma basis as if those firms were part of Thermo Fisher during the year-ago period, revenues increased 4 percent, the company said.

Other acquisitions bumped up revenues 1 percent year over year, while currency translation lowered revenues by 1 percent.

Thermo Fisher President and CEO Marc Fisher said in a statement that demand for analytical instruments across a broad base of customers, as well as ongoing strength in Thermo Fisher's biopharma services business drove revenue growth during the quarter.

"We saw a slight improvement in academic and government end markets," Casper said in a conference call this morning. "It was still down low single digits but it was actually better than Q4, so that was an improvement."

He said that demand for consumables has been "reasonable," but cautioned that capital equipment sales have been "muted as customers are making sure they have money to pay salaries and other things in an uncertain environment that happens later in the year."

Casper said, however, that he believes the firm's mass spectrometry offerings are gaining share. He said that sales of its Q-Exactive mass spec system, which was launched last year, "continues to be strong." The Q-Exactive is essentially a modified version of Thermo Fisher's Exactive benchtop Orbitrap instrument but with a quadrupole up front for MS/MS workflows.

Casper also said that sales of the firm's clinical diagnostic products remain strong, driven by demand for biomarker tests, such as its PCT marker for diagnosing sepsis.

"One area that we're very excited about is our companion diagnostics program," he said. "This is in the early stages, but we've leveraged our strong relationships to get in front of the right decision makers in pharma R&D organizations ... our goal is to be the key partner for the pharma industry by developing and marketing the diagnostic kits they need to support their new product launches."

By segment, Analytical Technologies increased revenues 21 percent year over year to $1.01 billion from $830 million, while Specialty Diagnostics revenues rose 27 percent to $729 million from $577 million a year ago. Laboratory Products and Services revenues inched up 4 percent to $1.51 billion from $1.44 billion a year ago.

Thermo Fisher's profit for the first quarter came in at $277.3 million, or $.75 per share, up from $252.2 million, or $.64 per share, in the year-ago period. On an adjusted basis, EPS was $1.17, surpassing analyst estimates of $1.11.

The firm's R&D expenses during the quarter jumped 23 percent year over year to $91.8 million from $74.8 million, while SG&A costs rose 16 percent to $701.3 million from $606.7 million.

Thermo Fisher ended the quarter with $788.3 million in cash and cash equivalents, and $4.3 million in short-term investments.

During the quarter, the company bought back 6 million shares of its stock for $300 million and initiated its first-ever quarterly dividend.

The company today raised its revenue and adjusted EPS estimates for full-year 2012 due to improved foreign currency exchange. Revenue is now expected to be in the range of $12.27 billion to $12.43 billion, up from an earlier range of $12.15 billion to $12.35 billion.

Adjusted EPS guidance was increased to between $4.71 and $4.83 from a previous range of $4.67 to $4.82.

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