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Thermo Fisher Q3 Revenues Shrink 1 Percent, Beat Analyst Estimates

NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported a 1 percent year-over-year decline in revenues for the third quarter but still beat the average Wall Street estimate on the top and bottom lines. 

For the three months ended Sept. 26, the company reported total revenues of $4.12 billion, down from $4.17 billion in the year-ago quarter but still above the analysts' average estimate of $4.10 billion. 

On an organic basis, revenues for the quarter grew 4 percent year over year, while currency translation reduced revenues by 6 percent, and acquisitions increased revenues slightly, Thermo Fisher said. 

The Life Sciences Solutions segment saw revenues inch up to $1.08 billion from $1.07 billion in Q3 2014, while Analytical Instruments were down to $779 million from $786 million. Specialty Diagnostics dropped to $777 million from $812 million, and Laboratory Products and Services rose to $1.64 billion from $1.63 billion. 

By end market, the industrial and applied markets grew in the low-single digits year over year, Thermo Fisher President and CEO Marc Casper said on a conference call following the release of the financial results. He added that the firm's core industrial businesses remain soft, while the applied markets performed well in the quarter. He added that the analytical instruments business serving the environmental and food safety markets saw "good growth" and chromatography had a strong quarter. 

The diagnostics and healthcare end market also saw low-single digit sales growth in the quarter while academic and government end markets also saw low-single digit growth. 

The biggest improvement was in pharma and biotech, which shot up more than 10 percent year over year with strong growth across all of Thermo Fisher's businesses serving that market, Casper said. 

Geographically, North America and Europe saw mid-single digit growth year over year during the third quarter, Thermo Fisher CFO Stephen Williamson said on the call. Asia-Pacific grew in the high-single digits with China up in the mid-teens, though Japan experienced only "muted" growth due to government budget challenges, Casper said. 

The rest of the world saw mid-single digit declines, Williamson said. 

The company posted a profit of $476.1 million, or $1.18 per share, for the quarter compared to a profit of $471.6 million, or $1.17 per share, in Q3 2014. On an adjusted basis, EPS was $1.80 and edged out the consensus Wall Street estimate of $1.79. 

Thermo Fisher reduced its R&D spending in the quarter 2 percent year over year to $171.6 million from $175.2 million, and lowered its SG&A expenses 7 percent to $911.1 million from $976.6 million. The company also recorded a gain of $15.5 million on restructuring and other costs for the recently completed quarter compared to an expense of $110.6 million in the year-ago quarter. 

"Our solid results again this quarter demonstrate our ability to effectively manage our business despite the [currency effect] headwinds and achieve our growth goals," Casper said on the call. 

Thermo Fisher revised its full-year 2015 revenue and adjusted EPS guidance to reflect current foreign currency exchange rates and the addition of Alfa Aesar, which Thermo Fisher acquired at the end of Q3 for £256 million ($395 million). Revenue estimates were raised to a new range of $16.81 billion to $16.91 billion from an earlier range of $16.72 billion to $16.86 billion. Williamson said that organically revenues are estimated to grow about 4 percent for the year.

Its EPS guidance was revised to a new range of $7.33 to $7.41 from a previous range of $7.28 to $7.41. 

Shares of Thermo Fisher were down 3 percent to $124.78 on the New York Stock Exchange in morning trading today.