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Thermo Fisher Scientific Q4, Full-Year Revenues Grow 5 Percent

NEW YORK (GenomeWeb) – Thermo Fisher Scientific on Thursday reported a 5 percent increase in fourth quarter and full-year 2019 revenues.

The Waltham, Massachusetts-based company had Q4 revenues of $6.83 billion, up from $6.51 billion in Q4 2018 and beating the consensus analyst estimate of $6.78 billion. Organic revenue also grew 5 percent, while acquisitions drove revenue up by 1 percent and currency effects decreased revenue by 1 percent.

"We finished the year strong and exceeded our goals for 2019," said Marc Casper, the company's president and CEO, during a conference call to discuss the firm's financial results. "All in all, it was an excellent year and we positioned Thermo Fisher very well to being this new decade as an even stronger company."

By business segment, life sciences solutions revenues grew 8 percent in Q4 to $1.84 billion from $1.70 billion during the year-ago quarter, and organic revenues grew 9 percent. Growth was driven by the bioproduction, biosciences, and genetic sciences businesses.

Casper remarked that the company's next-generation sequencing business has been focusing on the oncology market for the past few years. "You've seen over the last five years or so a steady stream of product launches that really have a benefit for clinical research and ultimately patients," he said. "Our technology uses less DNA sample to get a read, relative to the alternatives on the market, and the ease of use is outstanding."

In particular, he pointed out the launch of the Ion Torrent Genexus sequencing platform last November, which he said "is being very well received in the market with incredible customer interest."

Earlier this month, LabCorp said it plans to implement the Genexus, along with Thermo Fisher's Oncomine Precision assays, for research and development of companion diagnostics and for other future oncology and precision medicine applications.

Analytical instruments revenues decreased 3 percent in Q4, to $1.52 billion from $1.57 billion, and 2 percent organically. Sales in the electron microscopy business in particular slowed down compared to a year ago, when they were exceptionally strong, and the segment was impacted by a slower-than-expected release of funds by the Chinese government for capital equipment purchases.

Specialty diagnostics revenues decreased 1 percent in Q4 to $940 million from $950 million, but grew 7 percent organically. Revenue growth in this segment was impacted by the divestiture of the Anatomical Pathology business in June of 2019. Specialty diagnostics saw especially strong growth from its immuno-diagnostics and clinical diagnostics businesses, with continued strong growth from the healthcare market channel.

Laboratory products and services revenues grew 9 percent to $2.83 billion from $2.60 billion in Q4, and 7 percent organically, driven by strong growth across all businesses, led by the pharma services business and the research and safety market channel.

Thermo Fisher posted a Q4 net income of $1.0 billion, or $2.49 per share, up from $898 million, or $2.22 per share, for the year-ago quarter. Adjusted EPS for the quarter was $3.55, versus $3.25 in Q4 of 2018, narrowly beating the consensus analyst estimate of $3.54.

R&D spending in Q4 increased 4 percent to $262 million from $251 million last year, and SG&A expenses remained essentially flat at $1.21 billion.

For full-year 2019, Thermo Fisher posted $25.54 billion in revenues, up 5 percent from 24.36 billion in 2018 and beating the consensus analyst estimate of $25.49 billion. Organic revenue grew 6 percent, acquisitions increased revenue by 1 percent, and currency effects decreased revenue by 2 percent.

Life sciences solutions revenues grew 9 percent in 2019 to $6.86 billion from $6.27 billion, and 10 percent organically. Analytical instruments revenues increased 1 percent to $5.52 billion from $5.47 billion, and 3 percent organically. Specialty diagnostics revenues were flat at $3.72 billion for the year, and grew 5 percent organically. Laboratory products and services revenues, both reported and organic, grew 6 percent to $10.60 billion from $10.04 billion.

R&D expenses grew 4 percent to $1.00 billion from $967 million for the year, and SG&A costs climbed 2 percent to $4.93 billion from $4.82 billion.

The company's net income for 2019 was $3.70 billion, or $9.17 per share, up from $2.94 billion, or $7.24 per share, in 2018. Adjusted EPS was $12.35, compared to $11.12 last year, beating analysts' estimates of $12.32.

Thermo Fisher finished 2019 with $2.40 billion in cash and cash equivalents.

For 2020, the company expects revenues between $26.61 billion and $27.01 billion, which would be 4 to 6 percent growth over 2019. For adjusted EPS, it expects $13.49 to $13.67, a 9 to 11 percent increase over 2019. This guidance does not include any potential impact from the ongoing coronavirus outbreak.

In morning trading on the New York Stock Exchange, Thermo Fisher's shares were down about 3.5 percent, at $322.20.