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Thermo Fisher's Q4 Revenues Slide 2 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific today reported a 2 percent decline in fourth quarter revenues to $2.78 billion from $2.84 billion a year ago, and short of Wall Street expectations of $2.80 billion. However, the firm beat expectations on the bottom line.

Acquisitions increased revenues during the three months ended Dec. 31, 2010 by 2 percent year over year, while the effects of currency translation lowered revenues by 1 percent, resulting in a 3 percent decline in revenues organically, Thermo Fisher CFO Pete Wilver said during a conference call this morning following the earnings release.

Revenues for the quarter from flu-related businesses shrank by about $20 million year over year, while a reduction in the number of business days in the fourth quarter of 2010, compared to a year ago, cut revenues by $35 million, Wilver noted.

Excluding those results and a reduction in sales of Biosite products, revenues grew 3 percent organically year over year. Inverness terminated its contract with Thermo Fisher for the resale of Inverness' Biosite products in 2009.

Revenues in the firm's Analytical Technologies segment grew 4 percent to $1.24 billion from $1.19 billion a year ago, but the Laboratory Products and Services segment revenues slid 6 percent to $1.67 billion from $1.77 billion.

In Analytical Technologies, Thermo Fisher's clinical diagnostics sales remained strong throughout 2010. Results for the healthcare end market, excluding the flu and Biosite businesses, were in line with the company average, company CEO Marc Casper said during the conference call.

"We're very pleased with how our clinical diagnostics business is performing. We're very excited about the performance of Brahms," he said. Thermo Fisher acquired the German diagnostics shop in 2009. "That business' outlook is very bright and that clearly was a very good acquisition for us," he said.

Earlier this month, the Food Safety and Modernization Act was signed into law by President Obama, and today Casper called the new legislation "good news for Thermo Fisher because it will increase the need for testing in an already attractive food safety market not only in the US but worldwide."

The company is working with the US Food and Drug Administration on guidelines, he added, and Thermo Fisher expects to see revenue benefits from the legislation in late 2011 and into 2012. Thermo Fisher's analytical instruments, especially mass spectrometers and chromatography systems, stand to benefit the most from the legislation, Casper said.

During the quarter, research and development expenses increased 13 percent to $78.2 million from $69.3 million, while SG&A expenses rose 24 percent to $613.2 million from $598.6 million.

Thermo Fisher's net income for the quarter rose 9 percent to $297.5 million, or $0.75 per share, from $273.3 million, $0.65 per share, in the fourth quarter of 2009. On an adjusted basis, EPS was $1.00, a 10 percent increase from $0.91 per share a year ago, and exceeding consensus Wall Street estimates of $0.95.

For full-year 2010, the company reported $10.79 billion in revenues, up 7 percent from $10.11 billion in full-year 2009, but just short of Wall Street estimates of $10.80 billion.

Analytical Technologies revenues grew 11 percent to $4.61 billion from $4.15 billion in 2009. Laboratory Products and Services increased to $6.69 billion, up 4 percent from $6.43 billion a year ago.

Thermo Fisher recorded a profit of $1.04 billion, or $2.53 per share, in 2010, a 22 percent increase from $850.3 million, $2.01 per share, in 2009. On an adjusted basis, the company saw EPS of $3.57 for the year, a 17 percent rise from $3.05 per share in 2009, and exceeding analysts' estimates of $3.52 per share.

The firm's R&D costs rose 17 percent to $287.2 million from $246.1 million in 2009, and SG&A spending expanded 9 percent to $2.39 billion from $2.20 billion a year ago.

The company said it had $917.1 million in cash and cash equivalents as of Dec. 31.

For full-year 2011, Thermo Fisher forecasted revenues of between $11.33 billion and $11.45 billion, which would represent an increase of 5 percent to 6 percent year over year. EPS for the year is forecasted at between $4.00 and $4.10, which would be a 12 percent to 15 percent increase year over year.

In early trade on the New York Stock Exchange, shares of Thermo Fisher were down around 1 percent at $56.70.