Diagnostic Devices Drive Solid Q3 Sales for Thermo Fisher

Waltham, Mass.-based Thermo Fisher Scientific Inc., the world’s largest maker of laboratory equipment, reported a 9 percent rise in quarterly profit due to strong sales of its diagnostic devices, and the company raised the low end of its full-year results forecast.

Net profit rose to $317.6 million, or 86 cents per share, from $290.4 million, or 79 cents per share, a year earlier.

Excluding one-time items, the company reported adjusted earnings of $1.30 per share, topping analysts’ average expectations by 2 cents, according to Thomson Reuters.

Revenue for the quarter rose about 3 percent to $3.19 billion, roughly in line with Wall Street estimates of $3.17 billion.

Specialty diagnostics business sales rose 7 percent while revenue grew double digits in China.

The company, which still expects to close its acquisition of genetic testing company Life Technologies Inc. in early 2014, took up the low end of its 2013 adjusted earnings forecast by 2 cents and now expects to earn $5.31 to $5.39 per share. Thermo Fisher bought Life Technologies—a maker of technology used in scientific research, genetic analysis and applied sciences—in August for $13.6 billion.

Thermo Fisher also raised the low end of its full-year revenue forecast by $40 million to a range of $12.87 billion to $12.95 billion.

Management uses adjusted operating results to monitor and evaluate performance of the company’s three business segments:

Analytical Technologies Segment: In the third quarter of 2013, Analytical Technologies revenue increased 1 percent to $997 million, compared with revenue of $987 million in the third quarter of 2012. Segment adjusted operating income decreased 3 percent in the 2013 quarter, and adjusted operating margin was 18.1 percent, versus 18.9 percent a year ago.

Specialty Diagnostics Segment: Specialty Diagnostics revenue in the third quarter increased 7 percent to $759 million in 2013, compared with revenue of $707 million in the third quarter of 2012. Segment adjusted operating income rose 20 percent in the 2013 quarter, and adjusted operating margin increased to 26.8 percent, versus 24.1 percent a year ago.

Laboratory Products and Services Segment: In the third quarter of 2013, Laboratory Products and Services revenue increased 4 percent to $1.58 billion, compared with revenue of $1.53 billion in the 2012 quarter. Segment adjusted operating income increased 7 percent in the 2013 quarter, and adjusted operating margin grew to 14.9 percent, versus 14.4 percent a year ago.

“On the technology front, we had great uptake of our mass spectrometry systems … from customers in both life sciences and applied markets,” said Marc N. Casper, president and CEO. “In the quarter, we introduced new technologies to improve bioprocessing quality and efficiency as well as a new portable analyzer for on-site inspection of animal feed.

“In Asia-Pacific and emerging markets, our China team continued its excellent growth momentum, with another quarter of strong double-digit revenue performance,” Casper added. “During the quarter, we expanded our presence by opening a new production facility in Singapore to meet growing demand for vaccines and therapeutics.”