Thermo Fisher Scientific, Inc. (TMO) reported fourth quarter and full fiscal 2009 results. For the fourth quarter, earnings per share were 91 cents, surpassing the Zacks Consensus Estimate of 88 cents and the year-ago earnings of 87 cents. For fiscal 2009, earnings per share were $3.05, compared to the Zacks Consensus Estimate of $3.02 and the year-ago earnings of $3.13.
Quarterly Results
Total revenues in the fourth quarter increased 7% year over year to a record $2.84 billion. Growth was fueled by acquisitions and a favorable foreign currency translation. Analytical Technologies revenues increased 5% year over year to $1.19 billion. Laboratory Products and Services revenues increased 9% year over year to $1.77 billion. The company follows the practice of reporting inter-segment revenues, which were a negative $126.8 million in the reported quarter.
Thermo Fisher witnessed a contraction in margins. Gross margin declined 20 basis points (bps) year over year to 41.3% in the reported quarter. Adjusted operating and net margins declined 60 bps and 40 bps year over year to 18.0% and 13.6%, respectively. Both adjusted operating and net margins exclude amortization of acquisition-related intangible assets and other acquisition-related costs; restructuring costs; and related tax benefits.
Fiscal Year Results
Total revenues in fiscal 2009 declined 4% year over year to $10.11 billion, partly due to an unfavorable foreign currency translation. Analytical Technologies revenues declined 7% year over year to $4.15 billion. Laboratory Products and Services revenues were roughly flat year over year at $6.43 billion. Inter-segment revenues were a negative $470.8 million.
Balance Sheet and Cash Flow
Thermo Fisher ended fiscal 2009 with cash, cash equivalents and short-term investments of roughly $1.57 billion, an increase of 22% year over year. The company generated free cash flow of $0.46 billion and $1.47 billion in the fourth quarter and full fiscal 2009, respectively.
Outlook
Thermo Fisher has provided revenue and earnings per share guidance for fiscal 2010. For the year, Thermo Fisher expects revenues to grow 5% to 7% year over year to a range of $10.60 billion to $10.80 billion. Earnings per share are estimated to increase between 8% and 13% to a range of $3.30 to $3.45.
Headquartered in Waltham, Massachusetts, Thermo Fisher Scientific, Inc. is a scientific instrument maker and a world leader in serving science. The company was formed through the merger of Thermo Electron Corporation with Fisher Scientific International Inc. in Nov 2006. Thermo Fisher Scientific serves its customers through two principal brands, Thermo Scientific and Fisher Scientific.
Presently, we have a Neutral recommendation on Thermo Fisher.
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