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Thermo Shares Dive 10 Percent After Analyst Downgrades Stock on Lackluster Outlook

NEW YORK, Feb. 3 (GenomeWeb News) - Shares in Thermo Electron dived 10.3 percent, or $3.08, to $26.91 in late-afternoon trading after an analyst said the company's disappointing outlook for 2005 caused him to downgrade the stock.


JPMorgan analyst Tycho Peterson lowered Thermo's rating to "neutral" from "overweight," saying the company's first earnings forecast for 2005, issued late Wednesday, was below Wall Street expectations.


Thermo's goal of first-quarter earnings is between $.29 and $.31 per share, with full-year earnings of between $1.40 and $1.45 a share. Analysts on average had been projecting first-quarter earnings of $.34 per share and $1.48 for the full year, according to Reuters.


As GenomeWeb News reported yesterday, Thermo reported a 16-percent increase in its fourth-quarter revenues, driven by a 21-percent increase in sales for its life and laboratory sciences segment.


The company reported total revenues of $613 million for the quarter ended Dec. 31, 2004, up from $529 million in the fourth quarter of 2003.


Thermo's life and laboratory sciences segment contributed $455 million in revenues for the quarter, up sharply from $377 million in the prior-year period. This performance was in contrast to Thermo's measurement and control business segment, which posted $158 million in fourth-quarter revenues - a 4-percent increase over year-ago revenues of $152 million.


In a statement, Thermo credited "strong sales" of its mass spectrometry and molecular spectroscopy instruments, laboratory automation systems, and laboratory informatics for driving life science revenues upward. This growth, however, was slightly offset by "extremely weak sales of our rapid point-of-care test kits resulting from this year's light flu season compared with an exceptionally strong quarter in 2003."


Thermo reported fourth-quarter R&D expenses of $34.9 million, up slightly from $32.2 million in the fourth quarter of 2003.


The company reported $121 million in GAAP net income for quarter, up from $61.9 million in the year-ago period. Adjusted net income was $62.2 million in the current quarter and $55.1 million in the comparable period of 2003.


Thermo held $430.8 million in cash and cash equivalents as of Dec. 31, 2004.


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