Thermo Fisher Scientific announces record $2.84 billion revenue in fourth-quarter 2009

Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, reported that revenues increased 7% to a record $2.84 billion in the fourth quarter of 2009, compared with $2.65 billion in the 2008 quarter. The revenue growth reflects the impact of currency translation, which increased revenues by 3%, and the effect of acquisitions, which also increased revenues by 3%.

“I’m proud of the way our employees performed this past year in a tough economic environment”

Adjusted earnings per share (EPS) grew 5% to $0.91 in the fourth quarter of 2009, versus $0.87 in the 2008 quarter. Adjusted operating income for the 2009 quarter increased 4% versus 2008 results, and adjusted operating margin declined 60 basis points to 18.0%, compared with 18.6% in the 2008 period. GAAP diluted EPS was $0.65 in 2009, versus $0.67 in the year-ago period. GAAP operating income for the 2009 quarter was $324.3 million, compared with $322.5 million in 2008, and GAAP operating margin was 11.4%, compared with 12.2% a year ago.

For the full year, revenues declined 4% to $10.11 billion in 2009, compared with 2008 revenues of $10.50 billion. The revenue decline reflects the impact of currency translation, which decreased revenues by 2%, and the effect of acquisitions, which increased revenues by 1%.

Full-year adjusted EPS declined 3% to $3.05 in 2009, versus $3.13 in 2008. Adjusted operating income for 2009 decreased 8% over 2008 results, and adjusted operating margin declined 80 basis points to 17.0%, compared with 17.8% in 2008. GAAP diluted EPS was $2.01 in 2009, versus $2.25 in 2008. GAAP operating income in 2009 was $1.05 billion, compared with $1.23 billion a year ago, and GAAP operating margin was 10.4% in 2009, compared with 11.7% in 2008.

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.”

Fourth-Quarter and Full-Year Highlights

• Revenues increased 7% to a record $2.84 billion in the fourth quarter
• Adjusted EPS grew 5% in the fourth quarter
• Generated $0.46 billion of free cash flow in the quarter, and a record $1.47 billion for the year
• Invested nearly $250 million on R&D in 2009; launched innovative new products, including game-changing Thermo Scientific Velos LTQ mass spectrometry platform
• Recorded approximately $50 million in revenue from global government stimulus programs in 2009
• Deployed $650 million of capital on complementary acquisitions in 2009; announced agreements to acquire Ahura Scientific and Finnzymes just after year end

“I’m proud of the way our employees performed this past year in a tough economic environment,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “We successfully executed on our strategy – a combination of prudent cost-cutting in the short term and strategic investment that will yield growth over the long term. As a result of these actions, and the gradual recovery we are seeing in our key end markets, in the fourth quarter we grew adjusted EPS for the second quarter in a row and delivered organic revenue growth.

“We are pleased to be back on a growth path. To achieve our goals for 2010, we are focused on four priorities: investing to drive sustainable top-line growth, leveraging our unique value proposition for our customers, expanding our operating margins and effectively deploying our capital – all to generate shareholder value. Our attractive end markets, commitment to technology development and continued expansion in Asia will be catalysts for growth, along with the scale and breadth that comes from our position as the industry leader.”

Casper added, “Given the actions we took in 2009, and the improvement we are seeing in our markets, we expect to grow revenues by 5 to 7 percent in 2010 to a range of $10.60 to $10.80 billion. We expect to achieve adjusted EPS growth of 8 to 13 percent, to a range of $3.30 to $3.45.” (The 2010 guidance does not include any future acquisitions or divestitures and is based on present currency 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

Revenues in the Analytical Technologies Segment increased 5% in the fourth quarter of 2009 to $1.19 billion, compared with 2008 revenues of $1.14 billion. Adjusted operating income increased 2% in the fourth quarter of 2009, and adjusted operating margin declined to 21.8%, versus 2008 results of 22.3%.

For the full year, revenues declined 7% in the Analytical Technologies Segment to $4.15 billion in 2009, compared with $4.47 billion in 2008. Adjusted operating income for the segment declined 12% in 2009, and adjusted operating margin decreased to 20.2%, versus 21.4% a year ago.

Laboratory Products and Services Segment

In the Laboratory Products and Services Segment, revenues grew 9% in the fourth quarter of 2009 to $1.77 billion, compared with 2008 revenues of $1.62 billion. Adjusted operating income increased 5% in the fourth quarter of 2009, and adjusted operating margin declined to 14.1%, versus 2008 results of 14.7%.

For the full year, Laboratory Products and Services Segment revenues were $6.43 billion in 2009, compared with $6.46 billion in 2008. Adjusted operating income for the segment declined 4% in 2009, and adjusted operating margin declined to 13.7%, versus 14.2% a year ago.