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Thermo Fisher Scientific Reports 5 Percent Revenue Growth in Q1

NEW YORK (GenomeWeb) – Thermo Fisher Scientific said today that its first quarter 2019 revenues grew five percent year over year, driven by strong results across all of its business segments.

The company, headquartered in Waltham, Massachusetts, reported Q1 revenues of $6.12 billion, up 5 percent from $5.85 billion during the same period last year, beating average expectations by Wall Street analysts of $6.02 billion. Organic revenue growth was 7 percent, acquisitions contributed 1 percent, and currency effects decreased revenue by 3 percent.

"Our teams are strengthening our competitive position by successfully executing our growth strategy – a combination of launching great new products, leveraging our scale in high-growth and emerging markets, and enhancing our unique value proposition to be the strongest partner possible for our customers," Thermo Fisher President and CEO Marc Casper said in a statement.

In a call discussing the firm's results, Casper highlighted recent product launches, growth in emerging markets, and capital deployment that he said illustrate the firm's efforts to fulfill the central pillars of its business strategy.

Examples included new products for mass spectrometry and microscopy showcased during the quarter, and efforts to support an expanding business presence in Asia.

"Building off of our significant growth in 2018, our China business continues to be strong, delivering another quarter of better than 20 percent growth," Casper said during the call.

"There is a lot of enthusiasm from our colleagues and our customers about the opportunities ahead [in Asia]," he added. "In China specifically we continue to see broad-based growth across our end markets … providing technologies to advance precision medicine [and] enabling the flourishing biotech industry."

"Over the last five years there really has been an explosion of growth and new company formation ... [and] because many of these customers have worked outside of China they're very familiar with our capabilities so they're standardizing on our technologies. It's really an exciting opportunity."

Casper also cited Thermo Fisher's decision to acquire Brammer Bio as "one of the more significant highlights in the quarter." The company considers Brammer a leader in viral vector manufacturing and uniquely positioned to support expanding efforts in gene therapy, he said.

All of Thermo Fisher's business segments saw increased revenue during the quarter. Life sciences revenue was up 7 percent to $1.61 billion from $1.50 billion in Q1 of 2018.

Analytical instrument revenue grew 5 percent in the quarter to $1.32 billion from $1.26 billion during the year-ago quarter.

Specialty diagnostics revenue increased just 1 percent to $960 million from $950 million in the year-ago period.

The firm's laboratory products and services revenue grew 4 percent to $2.51 billion compared to $2.41 billion in Q1 of 2018.

Reflecting on the firm's performance across different end markets, Casper said during the call that pharma and biotech has remained a "very strong" contributor, with double-digit growth during the quarter.

In the academic and government sectors, the firm saw low single-digit growth. Looking at this end market from a geographic lens, Casper said that Thermo Fisher had a strong quarter in China, good conditions in North America, but "more muted conditions in Europe."

The company's diagnostics and healthcare business grew in the "mid-single digits," he added, with strong contributions among clinical diagnostics and immunodiagnostics customers.

Industrial and applied markets also delivered high single-digit growth "led by strength across our analytical instrument businesses," Casper said.

Thermo Fisher's net income for the quarter totaled $815 million, or $2.02 per share, up from $579 million, or $1.43 per share, for the year-ago quarter. Adjusted EPS were $2.81, compared to $2.50, and beating analysts' average expectation of $2.73.

Its R&D spending was $248 million in Q1 compared to $234 million in the same quarter last year, while its SG&A spending totaled $1.23 billion, up from $1.2 billion.

Thermo Fisher finished the quarter with $1.11 billion in cash and cash equivalents.

Given its performance in Q1 and the firm's Brammar Bio acquisition, the company said it was raising its revenue and earnings guidance for 2019. It now expects revenues between $25.17 and $25.47 billion, equivalent to 3 to 5 percent revenue growth over 2018, and adjusted EPS in the range of $12.08 to $12.22, yielding 9 percent to 10 percent year-over-year growth.

Thermo Fisher shares were up about a fraction of 1 percent at $264.14 in morning trading on the New York Stock Exchange.