NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported an 8 percent increase in fourth quarter revenues, driven by growth across its four business segments.
The company, headquartered in Waltham, Massachusetts, reported Q4 revenues of $6.51 billion, up 8 percent from $6.05 billion in Q4 of 2017 and beating the consensus analyst estimate of $6.23 billion. Organic revenue grew 8 percent, while acquisitions drove revenue up by 1 percent and currency effects decreased revenue by 2 percent.
"We delivered a fantastic year with excellent growth momentum all year long, and Q4 was no exception," said Marc Casper, the company's president and CEO, during a conference call today to discuss the firm's earnings.
Life sciences solutions revenues grew 8 percent in Q4 to $1.70 billion from $1.58 billion during the year-ago quarter. Organic revenues also grew 8 percent. The bioproduction, biosciences, and clinical NGS businesses led growth in this segment.
Analytical instruments revenues increased 11 percent to $1.57 billion from $1.41 billion, and 12 percent organically, driven by growth across all businesses in that segment.
Specialty diagnostics revenues increased 4 percent to $950 million from $910 million, and 5 percent organically. Growth in this segment was led by the transplant diagnostics, immuno-diagnostics, and clinical diagnostics businesses.
Laboratory products and services revenues grew 8 percent to $2.60 billion from $2.40 billion, and 9 percent organically, driven by strong growth across all businesses, in particular the pharma services business.
Thermo Fisher posted a Q4 net income of $898 million, or $2.22 per share, up from $528 million, or $1.30 per share, for the year-ago quarter, which included a one-time tax provision associated with US tax reform. Adjusted EPS for the quarter was $3.25, versus $2.79 in Q4 of 2017, beating the consensus analyst estimate of $3.18.
R&D spending increased 8 percent to $251 million from $233 million in Q4 of 2017, and SG&A expenses increased 3 percent to $1.21 billion from $1.17 billion a year ago.
For full-year 2018, Thermo Fisher posted $24.36 billion in revenues, up 16 percent from 20.92 billion in 2017 and beating the consensus analyst estimate of $24.08 billion. Organic revenue grew 8 percent, acquisitions increased revenue by 7 percent, and currency effects drove revenues up by 1 percent.
Life sciences solutions revenues grew 9 percent in 2018 to $6.27 billion from $5.73 billion in 2017. Analytical instruments revenues increased 13 percent to $5.47 billion from $4.82 billion. Specialty diagnostics revenues increased 7 percent to $3.72 billion from $3.49 billion. Laboratory products and services revenues grew 28 percent to $10.04 billion from $7.83 billion.
R&D expenses grew 9 percent to $967 million from $887 million for the year, and SG&A costs climbed 9 percent to $4.82 billion from $4.42 billion.
The company's net income for 2018 was $2.94 billion, or $7.24 per share, up from $2.22 billion, or $5.59 per share, in 2017. Adjusted EPS was $11.12, up 17 percent over the previous year's $9.49 and beating analysts' estimates of $11.05.
Thermo Fisher finished 2018 with $2.1 billion in cash and cash equivalents.
For 2019, the company expects revenues between $24.88 billion and $25.28 billion, which would be 2 to 4 percent growth over 2018. For adjusted EPS, it expects $12 to $12.20, an 8 to 10 percent increase over 2018.
The EPS guidance includes a $0.10 net dilution from the sale of Thermo Fisher's anatomical pathology business to PHC Holdings for about $1.14 billion in cash. The company announced the deal earlier this week and expects it to close in the second quarter. According to Senior Vice President and CFO Stephen Williams, the business had approximately $350 million in revenues in 2018 and Thermo Fisher will continue to sell anatomical pathology products through its channel business following the divestiture. As a result of the sale, it expects a $170 million reduction in annual revenue in 2019.
Casper said that Thermo Fisher plans to continue to use its capital for acquisitions, and the sale of the anatomical pathology business "will give us even more firepower to deploy [capital] over time," though there is no fixed timeline for this.
In morning trading on the New York Stock Exchange, Thermo Fisher's shares were up about 1 percent, at $238.90.