Skip to main content
Premium Trial:

Request an Annual Quote

Life Tech Acquisition Helps Boost Thermo Fisher Q2 Revenues 33 Percent

NEW YORK (GenomeWeb) – Thermo Fisher Scientific today reported a 33 percent jump in revenues year over year for the second quarter, boosted by a sharp increase in its Life Sciences Solutions segment.

For the three months ended June 28, total revenues reached $4.32 billion, up from $3.24 billion during the first quarter of 2013 and topping the consensus Wall Street estimate of $4.25 billion.

Organically, revenues grew 5 percent year over year, while currency translation added 1 percentage point to growth. Acquisitions, net of divestitures, added 27 percentage points to growth, Thermo Fisher said.

By segment, Life Sciences Solution revenues rose to $1.10 billion from $181 million a year ago, due primarily to the acquisition of Life Technologies, which was completed in February. On Thermo Fisher's conference call following the release of its financial results, CFO Pete Wilver said that the segment continued to see strong growth in the bioproduction business, as well as cell production and next-generation sequencing, which were partially offset by lower royalties.

President and CEO Marc Casper added that the Life Tech integration is seeing "excellent progress," and the company now expects to achieve $100 million in synergies in 2014, up from a previous forecast of $85 million. The firm is confident that it will meet its synergy target of $300 million to $350 million by the third year after the acquisition, he said.

Within Thermo Fisher's other segments, Analytical Instruments revenues rose to $793.4 million from $761 million, Specialty Diagnostics was up to $855.1 million from $793.6 million, and Laboratory Products and Services increased to $1.70 billion from $1.60 billion.

The mass spectrometry business, housed in Analytical Instruments, saw "very strong growth" in the second quarter, Wilver said, and that business, along with next-generation sequencing, were singled out by Casper as growth drivers for the company during the next six to 12 months.

By end markets, Casper called pharma/biotech "a terrific story" for Thermo Fisher with high-single digit growth in Q2. The academic/government market was up in the low-single digits, he added, as funds began to be released in the US under the new appropriations. The industrial/applied market rose in the low-single digits, and diagnostics and healthcare was up in the mid-single digits.

Thermo Fisher's North America and European businesses saw strength during Q2, but China was flat year over year resulting from a slower release of government funding.

"That said, we remain confident in our growth prospects for China and recorded bookings growth in the high teens in Q2," Casper said.

For the quarter, Thermo Fisher recorded a profit of $278.5 million, or $.69 per share, compared to a profit of $277.4 million, or $.76 per share, a year ago. On a non-GAAP basis, EPS was $1.72, beating the average analyst estimate of $1.62.

R&D expenses grew 90 percent year over year to $183.7 million from $96.7 million. SG&A expenses were up 40 percent to $1.02 billion from $734.4 million. Restructuring and other costs during Q2 2014 rose to $60.9 million from $21.5 million a year ago, Thermo Fisher said, while amortization of acquisition-related intangible assets was up to $343.6 million from $191.2 million.

The company exited the quarter with $584.9 million in cash and cash equivalents and $21 million in short-term investments.

"It was an excellent quarter for us financially across the board," Casper said on the call. "It's been a very strong year so far on the innovation front, and we look forward to more significant product launches to come in the second half. … So at this point of the year, we are on track to deliver a strong 2014."

Thermo Fisher raised its guidance for full-year 2014 to reflect a better-than-expected pharma/biotech business, increased synergies from its Life Tech acquisition, and the expected sale of the Cole-Parmer business. Revenues are now expected to be in the range of $16.86 billion to $16.98 billion, compared to a previous guidance of $16.84 billion to $17 billion. EPS guidance was raised to a new range of $6.85 to $6.97 from a previous range of $6.80 and $6.95.