Thermo Fisher Scientific reported record revenues and adjusted earnings per share for the fourth quarter of 2012, beating analyst estimates, as the world’s largest maker of scientific instruments and laboratory equipment benefited from new product launches, recent acquisitions, growing demand in China, and a tax benefit.
Net income jumped 30% year-to-year, to $376.4 million or $1.04 per share during Q4, from $288.9 million, or 77 cents per share in the final three months of 2011. Quarterly revenues rose 6%, to nearly $3.3 billion in Q4 2012 from about $3.1 billion a year earlier.
After adding cost of revenue charges, restructuring costs, amortization of intangible assets, and discontinued operations related to three acquisitions in the past two years, however, Thermo Fisher trumpeted adjusted fourth-quarter EPS of $1.36, 14% above the $1.19 reported a year earlier.
The third of those acquisitions was announced during Q4, when the company said it would shell out $925 million to buy One Lambda, a deal that expands Thermo Fisher‘s specialty diagnostics offering into the high-growth transplant diagnostics market.
For full-year 2012, net income dipped 11% to almost $1.2 billion, compared with $1.3 billion the previous year, reflecting the cost of discontinuing operations tied to Thermo Fisher’s $3.5 billion acquisition of Swedish-owned Phadia, a maker of testing technologies for allergic and autoimmune diseases; and $2.1 billion acquisition of chromatography equipment maker Dionex, both deals completed in 2011. However, full-year revenue grew 8% from $11.56 billion or $4.16 in adjusted EPS that year, to $12.5 billion or a record $4.94 adjusted EPS in 2012.
“I’m very proud of what our team has accomplished in 2012 in spite of the challenging environment,” Marc N. Casper, Thermo Fisher’s president and CEO, said this morning on a conference call with analysts to discuss the Q4 and 2012 results. “Our position as the global industry leader is only getting stronger. We have a proven strategy, a sound operating plan, and we executed well.”
Thermo Fisher also issued upbeat guidance for 2013, projecting revenue of between $12.8 billion and $13 billion, or 2% to 4% annual revenue growth; as well as adjusted earnings per share of $5.32 to $5.46, up 8% to 11% over 2012.
The 2013 guidance is based on current foreign exchange rates and does not include any future acquisitions or divestitures. During questions from analysts, Casper shed no new light on whatever interest Thermo Fisher may have in acquiring Life Technologies, the subject earlier this week of analyst speculation and a Reuters news report based on unnamed sources—deflecting questions on acquisition criteria beyond restating general principles.
Fourth-quarter and 2012 results were buoyed by launches of several new products, including the iCAP™Q ICP mass spectrometer, Trace™ 1300 gas chromatograph, TruNarc™ handheld drug analyzer, Lynx SuperSpeed centrifuge, and the PikoReal™ PCR system.
Casper also cited strong results in the Asia-Pacfic region, which grew to 17% of total revenues last year, up from 15% in 2011. China has become became Thermo Fisher’s second largest source of revenue among nations, accounting for more than $700 million in 2012.
Thermo Fisher also reported a $42.3 million income tax benefit the company attributed to several factors, including pre-tax reconciling items between GAAP and adjusted net income, adjusting deferred tax balances due to tax rate changes, the ability to use tax loss carryforwards as a result of acquiring Phadia, and resolution of tax audits.