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Life Tech Buy Lifts Thermo Fisher's Q4 Revenues 29 Percent

NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported a 29 percent year-over-year increase in its fourth quarter revenues on contributions from its Life Technologies acquisition. 

For the three months ended Dec. 31, 2014, Thermo Fisher said that revenues totaled $4.49 billion, compared to $3.47 billion in Q4 2013 and beating the consensus Wall Street estimate of $4.38 billion.

Organic revenues grew 6 percent year over year, the company said, while acquisitions — primarily the buy of Life Technologies, completed in February 2014 — increased revenues by 26 percent. Currency translation reduced revenues by 3 percent.

By segment, Life Sciences Solutions, created by the Life Tech buy, posted $1.19 billion in revenues, compared to $191.7 million a year ago. Analytical Instruments had $902.4 million in revenues, compared to $887.7 million in Q4 2013, while Specialty Diagnostics revenues were up to $863 million from $833.2 million, and Laboratory Products and Services revenues increased to $1.68 billion from $1.65 billion. 

On Thermo Fisher's conference call this morning, President and CEO Marc Casper said that the firm saw strength across all its end markets. Industrial and applied markets were up in the mid-single digits from a year ago, as was diagnostics and healthcare. Pharma/biotech and academic/government each grew in the high-single digits in Q4, he said. 

Thermo Fisher posted a profit of $601.2 million, or $1.49 per share for the fourth quarter, up from a profit of $342.1 million, or $.92 per share a year ago. Adjusted EPS was $1.99, beating the consensus Wall Street estimate of $1.94. 

Its R&D spending rose 74 percent year over year to $182.5 million from $104.7 million, while its SG&A costs increased 32 percent to $1.01 billion from $764 million. During the quarter, Thermo Fisher spent $33.7 million on restructuring and other costs, compared to $23.3 million a year ago. 

"Our excellent performance in Q4 topped off what was a great year for us financially, operationally, and strategically," Casper said on the call. "This positions the company well for a strong year ahead and a very bright future over the longer term." 

For full-year 2014, Thermo Fisher said that its revenues increased to $16.89 billion from $13.09 billion, a 29 percent improvement year over year, and above the average estimate of $16.78 billion by analysts. 

Organically revenues grew 4 percent year over year, while acquisitions added 25 percent in growth. Currency effects had a "slightly negative" impact, Thermo Fisher CFO Peter Wilver said on the call. 

Life Sciences Solutions revenues shot up to $4.20 billion from $712.5 million in 2013, and Analytical Instruments grew to $3.25 billion from $3.15 billion. Specialty Diagnostics increased to $3.34 billion from $3.19 billion a year ago, and Laboratory Products and Services were up to $6.60 billion from $6.40 billion. 

Thermo Fisher had a net income for 2014 of $1.89 billion, or $4.71 per share, compared to a net income of $1.27 billion, or $3.48 per share, in 2013. Adjusted EPS was $6.96, besting the average analysts' estimate of $6.91. 

The company spent $691.1 million on R&D in 2014, a 75 percent jump from $395.5 million in 2013. Its SG&A costs increased 37 percent year over year to $3.99 billion from $2.91 billion. It reported a gain of $598.2 million from restructuring and other activities in 2014, compared to a cost of $77.7 million in 2013.   

Thermo Fisher ended the year with $1.34 billion in cash and cash equivalents. 

On the call, Wilver said that revenues are anticipated to grow in the 1 percent to 3 percent range for the first quarter of 2015, with organic revenue growth of 2 percent to 4 percent. Adjusted EPS is expected to grow between 2 percent to 6 percent. 

For full-year 2015, the company is guiding to revenues of between $16.80 billion and $17 billion. The guidance assumes a 4.5 percent headwind from currency effects, company officials said. Adjusted EPS is anticipated to be in the range of $7.22 to $7.40, which assumes an 8 percent headwind due to currency effects.