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Thermo Reports 6% Q4 Revenue Growth
News

Thermo Reports 6% Q4 Revenue Growth

Thermo Reports 6% Q4 Revenue Growth
News

Thermo Reports 6% Q4 Revenue Growth

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Fourth Quarter and Full Year 2013 Highlights

  • Grew full year adjusted earnings per share (EPS) by 10% to a record $5.42, and fourth quarter adjusted EPS by 5% to a record $1.43.
  • Increased fourth quarter revenue by 6% to a record $3.47 billion.
  • Expanded adjusted operating margin in the fourth quarter by 40 basis points to 20.0%.
  • Generated free cash flow of $1.75 billion for the full year.
  • Launched innovative new Thermo Scientific products during the year to strengthen leading mass spectrometry, chromatography, specialty diagnostics and biosciences offerings, highlighted by the breakthrough Orbitrap Fusion Tribrid and new triple-quad platforms.
  • Achieved 20% growth in China for the year by leveraging investments to expand R&D, manufacturing and commercial capabilities, and delivered strong results in other high-growth markets, including Korea and Brazil.
  • Returned more than $300 million of capital to shareholders through stock buybacks and dividends.
  • Acquiring Life Technologies to add complementary genomics, next-generation sequencing and forensic science capabilities for customers in life sciences and applied markets, and to expand presence in APAC and emerging markets.

Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Use of Non-GAAP Financial Measures.”

“Our teams executed very well in the quarter to achieve outstanding results on both the top and bottom line,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “All three business segments reported solid growth, and drove productivity to deliver 40 basis points of adjusted operating margin expansion. Our excellent operating performance throughout 2013 extended our track record of delivering strong adjusted EPS growth, and led to a 10% increase for the full year.

“These results demonstrate the success of our growth strategy and our ability to further differentiate Thermo Fisher in the markets we serve. We strengthened our innovation leadership by launching new products across our portfolio for customers in research, bioproduction, specialty diagnostics and applied markets. We also leveraged our scale and depth of capabilities to help our customers in high-growth emerging markets respond to the need for better air quality, safer food supplies and growing demand for specialty diagnostics.

“Last, we look forward to completing our acquisition of Life Technologies, which will enhance our unique customer value proposition by broadening our product offering and adding another premier life sciences brand. We’re excited about the new opportunities we will have by combining our genomics, proteomics and specialty diagnostics technologies to help our customers accelerate results and improve human health.”

Fourth Quarter 2013
For the fourth quarter of 2013, adjusted EPS grew 5% to $1.43, versus $1.36 in the fourth quarter of 2012. Revenue for the quarter grew 6% to $3.47 billion in 2013, versus $3.26 billion in 2012. Organic revenue growth was also 6% as the effects of acquisitions and currency translation were immaterial. Adjusted operating income for the fourth quarter of 2013 increased 9% compared with the year-ago period, and adjusted operating margin expanded to 20.0%, compared with 19.6% in the fourth quarter of 2012.

GAAP diluted EPS for the fourth quarter of 2013 was $0.92, versus $1.04 in the same quarter last year. The 2012 period included a favorable impact related to a tax rate change in a foreign jurisdiction. GAAP operating income for the fourth quarter of 2013 increased 14% to $455 million, compared with $401 million in 2012. GAAP operating margin increased to 13.1%, compared with 12.3% in the fourth quarter of 2012.

Full Year 2013
For the full year 2013, adjusted EPS grew 10% to $5.42, versus $4.94 in 2012. Revenue for 2013 grew 5% to $13.09 billion, versus $12.51 billion a year ago. Organic revenue grew 3%; acquisitions increased revenue by 2% and currency translation had a nominal impact. Adjusted operating income for 2013 increased 7% compared with 2012, and adjusted operating margin expanded to 19.5%, compared with 19.0% a year ago.

GAAP diluted EPS for 2013 was $3.48, versus $3.21 in 2012. GAAP operating income for 2013 increased 9% to $1.61 billion, compared with $1.48 billion a year ago. GAAP operating margin increased to 12.3%, compared with 11.8% in 2012.

Annual Guidance for 2014
Casper added, “Our excellent performance in 2013 positions us well for the year ahead. We look forward to successfully integrating Life Technologies and fully leveraging our depth of capabilities to create value for our customers and achieve our goals for growth in 2014.”

Thermo Fisher is initiating adjusted EPS and revenue guidance for the full year 2014. The company expects to achieve adjusted EPS in the range of $6.70 to $6.90 for 2014, which would result in 24% to 27% adjusted EPS growth over 2013. The company expects to achieve 2014 revenue in the range of $16.63 billion to $16.83 billion, for 27% to 29% revenue growth year over year.

The company’s 2014 guidance includes the results of Life Technologies from an assumed close date, and includes the results of the previously announced divestitures through an assumed sale date. The guidance does not include any other future acquisitions or divestitures and is based on current foreign exchange rates. The adjusted EPS estimate excludes amortization expense for acquisition-related intangible assets and certain other items detailed later in this press release under the heading “Use of Non-GAAP Financial Measures.”

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