This article has been updated with additional information from Thermo Fisher Scientific's earnings call.
NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported 23 percent growth in revenues for the first quarter, driven by strong results across all of its business segments.
"We achieved excellent growth in revenue and earnings," said President and CEO Marc Casper during a conference call this morning to discuss the company's financial results. "Our team executed well to capitalize on the good market conditions, and we continued to successfully execute our growth strategy. ... Our great performance in Q1 sets us up to deliver another outstanding year."
Thermo Fisher reported $5.85 billion in total revenues for the first quarter, up 23 percent from $4.77 billion during the same period last year. Revenues beat expectations by Wall Street analysts of $5.63 billion. Organic revenue grew 7 percent, acquisitions contributed 12 percent to revenue growth, and currency effects increased revenue by 4 percent.
All of Thermo Fisher's business segments saw increased revenue during the quarter. Life sciences solutions revenue was up 10 percent to $1.50 billion from $1.36 billion in Q1 of 2017, with strong growth from the bioproduction, next-generation sequencing, and biosciences businesses. Organic growth for this segment was 5 percent.
Analytical instrument revenue grew 19 percent to $1.26 billion in the quarter, up from $1.05 billion during the year-ago quarter, and benefited from growth across all businesses in that segment. Organic growth for analytical instruments was 13 percent.
Specialty diagnostics revenue increased 9 percent to $950 million from $870 million in the year-ago period, with particularly strong growth from the healthcare market channel. Organic growth for this segment was 5 percent. Casper said that specialty diagnostics benefited from the severe flu season in the US but those gains were canceled out by weak demand for seasonal allergy-related products during the first quarter.
Finally, laboratory products and services revenue, which include the Patheon business that Thermo Fisher acquired last August, grew 42 percent to $2.41 billion compared to $1.70 billion in Q1 of 2017. This segment, which grew 6 percent organically, saw strong growth in its clinical trial logistics and research channel businesses.
During the call, Casper pointed out that recent products contributed to the revenue growth, among them the Thermo Scientific Orbitrap Q Exactive HF mass spectrometer. He also noted several new product launches, for example, the Ion GeneStudio S5 series of next-generation sequencers, which he said feature a flexible chip format and can be integrated with existing products for a seamless workflow. He also mentioned the company's expanding Oncomine portfolio of liquid biopsy and immuno-oncology assays that help researcher bring new cancer diagnostics to the clinic.
Casper also commented on the company's growing business in China, India, and South Korea, which led to double-digit revenue growth across the Asia-Pacific region. In addition, he noted that Thermo Fisher was the lead organizer of the first China-US Precision Medicine Summit last month in Beijing, which brought together 400 participants across government, academia, and industry "to accelerate precision medicine advancements and continue to increase the impact on patient care."
Finally, Casper briefly touched upon Thermo Fisher's recent acquisition of IntegenX. The company "nicely complements our technology used for human identification by adding a rapid DNA platform," he said. "It's a great addition to our genetic sciences offering."
Thermo Fisher's net profit for the quarter totaled $579 million, or $1.43 per share, up from $551 million, or $1.40 per share, for the year-ago quarter. Adjusted EPS was $2.50, up year over year from $2.08, and beating analysts' average expectation of $2.40 per share.
Its R&D spending was $234 million in Q1 compared to $215 million last year, and SG&A spending totaled $1.2 billion, up from $1.1 billion last year.
Thermo Fisher finished the quarter with $950 million in cash and cash equivalents.
Given its strong operational performance in Q1, the company raised its revenue and earnings guidance for 2018. It now expects revenues between $23.62 billion and $23.86 billion, equivalent to 13 to 14 percent revenue growth over 2017, and EPS in the range of $10.80 to $10.96, equating 14 to 15 percent year-over-year growth.
Thermo Fisher's shares were down a fraction of a percent at $212.98 in morning trading on the New York Stock Exchange.