NEW YORK – Thermo Fisher Scientific on Wednesday reported a 6 percent year-over-year increase in its third quarter revenues, driven by growth across most of its business segments.
Total Q3 revenues for the Waltham, Massachusetts-based company were $6.27 billion, up from $5.92 billion in the year-ago quarter and beating the average Wall Street estimate of $6.18 billion. Organic revenue grew 7 percent and foreign currency effects decreased revenue by 1 percent.
"We delivered another great quarter, achieving strong financial performance while continuing to effectively execute our growth strategy to make Thermo Fisher Scientific an even stronger partner for our customers," said Thermo Fisher President and CEO Marc Casper during a conference call to discuss the firm's financial results.
Casper pointed out several new products that launched during the quarter, including the US Food and Administration-cleared Thermo Scientific TSQ Altis and Quantis MD mass spectrometers and the Vanquish MD HPLC for clinical diagnostic laboratories; a new real-time PCR solution for respiratory pathogen detection; the Thermo Scientific Krios G4 compact electron microscope for structural biology; and the Thermo Scientific TruBio Discovery bioproduction automation system.
He also noted that the company recently opened a new Center of Excellence for transplant diagnostics near Los Angeles and a new Biosciences Customer Exploration Center in Shanghai, as well as a clinical trials logistics facility in Suzhou, China.
Thermo Fisher continued to do well in high-growth and emerging markets. Its China business grew 13 percent in Q3, Casper reported, adding that the company's offerings are "perfectly aligned with the government priorities in China's five-year plan."
In addition, the company completed its acquisition of an active pharmaceutical ingredient (API) manufacturing facility in Cork, Ireland, from GlaxoSmithKline on September 30.
After the end of Q3, the firm also repurchased $750 million worth of shares and completed refinancing $5.6 billion of its debt.
Almost all of Thermo Fisher's business segments grew their revenues during the quarter.
Life sciences solutions revenue was up 13 percent to $1.7 billion from $1.5 billion in Q3 of 2018. Organic revenue also grew 13 percent, driven by good growth across the segment, led by the bioproduction and biosciences businesses.
Analytical instrument revenue grew 2 percent in the quarter to $1.36 billion from $1.33 billion during the year-ago quarter. Organic growth was up 3 percent, driven by the chromatography and mass spectrometry businesses.
Specialty diagnostics revenue decreased 2 percent to $879 million from $894 million in Q3 of 2018, reflecting the divestiture of the Anatomical Pathology business in June. Organic growth, however, was 7 percent, led by the transplant diagnostics and immunodiagnostics businesses.
Laboratory products and services revenue grew 6 percent to $2.62 billion from $2.47 billion in Q3 of 2018. Organic growth was also 6 percent, driven by strong growth across the segment, led by the pharma services business.
Net income for the quarter was $760 million, or $1.88 per share, up from $709 million, or $1.75 per share, for the year-ago quarter. Adjusted EPS increased to $2.94, up 12 percent from $2.62 in Q3 of 2018 and beating analysts' average estimate of $2.87.
The firm's R&D spending for the quarter was $247 million, up 3 percent from $240 million in the same quarter last year. SG&A spending totaled $1.23 billion, up 4 percent from $1.18 billion a year ago.
The company finished the quarter with $1.27 billion in cash and cash equivalents.
Thermo Fisher raised its earnings guidance and the lower end of its revenue guidance for 2019, primarily to reflect stronger-than-expected operational performance and the benefits of its refinancing activities, which are partially offset by a more adverse foreign currency exchange environment. It now expects revenues between $25.34 billion and $25.50 billion for the year, which would be a 4 to 5 percent growth over 2018, compared to its previous guidance of $25.30 billion to $25.50 billion. Earnings per share are now expected to range from $12.28 to $12.34, which would be a 10 to 11 percent year-over-year growth, compared to the previous guidance of $12.16 to $12.26.
Thermo Fisher shares were up about 5 percent at $294.40 in morning trading on the New York Stock Exchange.