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Thermo Posts 4 Percent Rise in Q2 Revenues, Expects New Mass Spec Releases to Drive 2014 Growth

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Thermo Fisher Scientific this week reported that its second quarter revenues improved 4 percent year over year, with strong growth in its liquid chromatography and mass spec businesses.

Companywide revenues for the three months ended June 29 reached $3.24 billion, up from $3.11 billion a year ago, beating the consensus Wall Street estimate of $3.22 billion.

The company's Analytical Technologies' division, which houses its mass spec business, saw revenues rise 4 percent to $1.01 billion from $972 million a year ago. Specialty Diagnostics saw an 8 percent improvement to $794 million from $732 million. And Laboratory Products and Services, saw revenues increase to $1.58 billion, up 3 percent from $1.54 billion in the year-ago period.

On a conference call following release of the results, Thermo Fisher President and CEO Marc Casper highlighted several mass spec instruments the company launched last month at the American Society for Mass Spectrometry annual meeting (PM 6/14/2013).

Regarding its new triple quadrupole instruments – the TSQ Endura and Quantiva, Casper said that the company anticipated their release would "allow for both the replacement cycle for our current customers and a share gain opportunity for taking share from other competitors." Currently, Thermo Fisher sits a distant fourth in triple quadrupole market share behind AB Sciex, Agilent, and Waters, which together make up roughly 90 percent of the market.

Casper also cited positive customer feedback for the company's new Orbitrap Fusion instrument, saying that the product could "be a really significant growth driver six months out from now, with some nice momentum in the short term."

Thermo Fisher posted a net income of $277.4 million, or $.76 per share, for the quarter compared to $233.8 million, or $.63 per share, a year ago. On an adjusted basis, EPS was $1.32 beating the average Wall Street estimate of $1.30.

R&D spending grew 3 percent to $96.7 million from $94.2 million in the second quarter of 2012, while SG&A costs increased 4 percent to $734.4 million from $705.2 million a year ago.

Thermo Fisher ended the quarter with $1.41 billion in cash and cash equivalents.

The firm lowered its full-year 2013 revenue guidance to a new range of $12.83 billion to $12.95 billion, compared to an earlier guidance of $12.84 billion to $13.00 billion, to reflect increased headwinds from currency exchange rates. Thermo Fisher also raised the low end of its adjusted EPS guidance for the full year by $.02, to a new range of $5.29 to $5.39.

The guidance does not include the Life Tech acquisition or the impact of related financing activities.

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