Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today reported its financial results for the first quarter ended April 2, 2011.
First Quarter 2011 Highlights
- Adjusted earnings per share (EPS) grew 12% to a record $0.92.
- Revenues grew 4% to a record $2.72 billion.
- Adjusted operating margin increased 30 basis points to 17.6%.
- Launched new innovative software and instrumentation at Pittcon to broaden life sciences, environmental and safety applications.
- Accelerated investment in emerging markets with plans to build new manufacturing facility in China to serve local life sciences customers.
- Spent $538 million to buy back 9.6 million shares. Authorized additional $750 million share repurchase program, with $700 million remaining at quarter end.
- Sold two laboratory-testing services businesses - Athena Diagnostics and Lancaster Laboratories - just after quarter end, resulting in total proceeds of $940 million.
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." As previously announced, results for the Athena Diagnostics and Lancaster Laboratories businesses are reported as discontinued operations for all periods presented and have been removed from the 2011 guidance.
"We are off to a good start to the year, with solid first quarter performance," said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. "We achieved record EPS and delivered 30 basis points of adjusted operating margin expansion on top of our exceptional first quarter results a year ago. This puts us in an excellent position to meet our growth goals for 2011.
"Our ability to consistently deliver strong EPS growth is based on our focus on innovation, emerging markets and PPI (Practical Process Improvement). It was a great quarter in terms of the depth of new products we showcased at Pittcon, from mass spectrometry-based workflows for drug screening, to high-performance spectroscopy instruments for chemical analysis, to portable analyzers for applications in the field. We continued to expand our presence in Asia-Pacific markets, and announced plans to open another new facility in China next year, where we will produce laboratory consumables for local life sciences customers. Our continuous efforts to increase productivity through our PPI and PPI-Lean programs drove our margin expansion. Finally, in the quarter we deployed $538 million of capital to buy back our stock and authorized an additional $750 million share repurchase program."
For the first quarter of 2011, adjusted EPS grew 12% to a record $0.92, versus $0.82 in the first quarter of 2010. Revenues for the first quarter of 2011 increased 4% to $2.72 billion, compared with $2.63 billion in the first quarter a year ago. Acquisitions increased revenues by 2%, and the favorable effect of currency translation increased revenues by 1%. Adjusted operating income for the first quarter of 2011 increased 5% compared with the year-ago period, and adjusted operating margin expanded 30 basis points to 17.6%, compared with 17.3% in the first quarter of 2010. GAAP diluted EPS for the first quarter of 2011 was $0.64, versus $0.56 in the same quarter last year. GAAP operating income for the first quarter of 2011 was $321.5 million, compared with $284.6 million in the first quarter of 2010, and GAAP operating margin was 11.8%, compared with 10.8% in the first quarter of 2010.
Annual Guidance for 2011
Thermo Fisher announced that it is raising its adjusted EPS and revenue guidance for the full year 2011. The company is raising its adjusted EPS guidance by $.05 to a new range of $4.05 to $4.15 for 2011, which would result in 17% to 20% EPS growth over 2010. The company is raising the midpoint of its 2011 revenue guidance by $180 million to a new range of $11.52 billion to $11.62 billion, for 9% to 10% revenue growth over 2010. This guidance includes the benefit of the Dionex acquisition, which is expected to close in mid-May, and does not include any other future acquisitions or divestitures.
The 2011 guidance is based on current foreign exchange rates. In addition, 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."
Management uses adjusted operating results to monitor and evaluate performance of the company's business segments.
Analytical Technologies Segment
In the first quarter of 2011, Analytical Technologies Segment revenues increased 9% to $1.18 billion, compared with revenues of $1.08 billion in the first quarter of 2010. Segment adjusted operating income increased 11% in the first quarter of 2011, and adjusted operating margin increased to 21.0%, versus 20.6% in the 2010 quarter.
Laboratory Products and Services Segment
In the first quarter of 2011, Laboratory Products and Services Segment revenues increased 1% to $1.69 billion, compared with revenues of $1.67 billion in the first quarter of 2010. Segment adjusted operating income was flat in the first quarter of 2011, and adjusted operating margin decreased to 13.7%, versus 13.9% in the 2010 quarter.
Thermo Fisher Scientific Inc.