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Thermo Fisher Q2 Revenues Slip 1 Percent on Currency Effect

NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported a 1 percent decline in its second quarter revenues but still beat analysts' average estimate. 

For the three months ended June 27, the firm posted $4.27 billion in revenues, down from $4.32 billion from the year-ago quarter but above the consensus Wall Street estimate of $4.17 billion.

Thermo Fisher said that its organic revenue growth was 6 percent. The firm said that divestitures, net of acquisitions, decreased its revenue by 1 percent in the quarter and currency translation reduced revenue by 6 percent. 

By segment, Life Sciences Solutions revenues grew to $1.13 billion from $1.10 billion a year ago, while Analytical Instruments dropped to $777 million from $793.4 million. Specialty Diagnostics sales were down to $817.1 million from $855.1 million, and Laboratory Products and Services fell to $1.69 billion from $1.70 billion. 

By end markets, academic and government revenues were up in the low-single digits in the second quarter compared to a year ago, Thermo Fisher President and CEO Marc Casper said on a conference call following the release of the company's financial results. 

Several legislative proposals to increase funding to the National Institutes of Health are currently being considered, and while Casper said that he doesn't expect "the budgeting process … to have any impact in this calendar year, [it] could set us up for a very attractive growth environment for the NIH and US academic and government [environment] going forward, should those things become law." 

Also, the industrial and applied market grew in the low-single digits, as did diagnostics and healthcare, while pharma and biotech grew in the mid-teens, Casper said. 

Geographically, North America and Europe grew in the mid-single digits, while Asia-Pacific was up in the high-single digits with China up in the mid-teens and Japan up in the low-single digits as funding in that country began to flow again in Q2, CFO Peter Wilver said on the call. The rest of the world improved in the low-single digits. 

On August 1, Stephen Williamson will take over as CFO of the firm. Casper announced on the call that in March 2016, Wilver will return to the firm in the newly created position of executive vice president and chief administrative officer, where he will oversee several of the firm's corporate functions, leaving Casper more time to devote to customers, he said. 

Thermo Fisher recorded net income of $511.6 million, or $1.27 per share, in Q2 2015, compared to a profit of $278.5 million, or $.69 per share, in Q2 2014. On an adjusted basis, EPS was $1.84 and beat analysts' consensus estimate of $1.78. 

Its R&D spending was trimmed 5 percent year over year to $174.6 million from $183.7 million, while its SG&A costs were down 9 percent to $928.3 million from $1.02 billion. 

To reflect current foreign currency exchange rates and strong operating performance, Thermo Fisher raised is full-year 2015 revenue guidance to a range of between $16.72 billion and $16.86 billion, compared to a previous guidance of $16.67 billion to $16.83 billion. EPS guidance also was increased to a new range of $7.28 to $7.41 from a previous range of $7.25 to $7.40. 

The guidance does not include the $403 million acquisition of Alfa Aesar, which is expected to be completed by the end of the year.

"Financially we delivered strong growth on both the top and bottom line," Casper said on the call. "Operationally, our team delivered very well, and we gained share with our customers. Strategically, we continued to execute our growth plans with significant new product launches, good progress in emerging markets, and many examples in this quarter that demonstrate how our unique value proposition is resonating with our customers. 

In Wednesday morning trade on the New York Stock Exchange, shares of Thermo Fisher were up more than 2 percent at $139.82.