Thermo Fisher Scientific's merger integration appears to be on track with the 'life science superstore' attracting more business than ever. The company reported revenue increases to $2.34bn for the first quarter of 2007 from $684m in a year earlier as a result of the November merger with Fisher Scientific. To aid year-to-year comparison, the company's quarterly performance was also provided as if Thermo and Fisher had been combined for the whole of 2006 which showed 11.5 per cent growth from revenues of $2.10 billion. "Much of this growth came from new products introduced within the last two years, and now marketed under our Thermo Scientific brand. Demand remained strong for our LTQ Orbitrapmass spectrometers, iCAP elemental analysis systems and Niton portable XRF analyzers," said Marijn Dekkers, CEO of Thermo Fisher Scientific. "I'm also pleased to report that we are right on track with the merger integration. That said, we are also building upon our position as the technology leader, which continues to be a key contributor to our growth." However, spending on R&D as a percentage of income decreased from the pre-merger value of 5.7 per cent ($38.7m) to 2.6 per cent of income ($59.8m). Increased sales to big pharma helped Waters continue its recovery from a difficult year in 2005 that had been attributed to lower and erratic sales to pharmaceutical heavyweights. The company saw sales jump 14 per cent in the first quarter of 2007 to $330.8m carrying on the growth the company saw at the end of last year . "This is the second quarter in a row for double-digit growth in the US, and the improvement that we are seeing in spending by our largest pharma accounts is a key factor," said Douglas Berthiaume, CEO of Waters. This could indicate a recovery in equipment spending by pharmaceutical companies, that has been widely predicted to remain flat and either signals a recovery for the pharmaceutical industry or an increased desire for efficiency. R&D spending dropped slightly from $19.0m (6.5 per cent of sales) in 2006 to $18.7m in 2007 (5.6 per cent of sales). Successful operations in India and China led sales in Asia to increase by 40 per cent. The Asian market was highlighted as a key growth market for the company at Pittcon 2007 as pharmaceutical companies continue to outsource R&D to Asia. Varian's efforts to increase the geographic efficiencies of its global operations helped the company to post strong second quarter results. The company reported that Q2 sales were up 10 per cent to $229.9m compared to $209.6m the year before. R&D investment also increased by 10 per cent to $16m - approximately 7 per cent of sales. "Our investment in research and development continues to pay off," said Garry W. Rogerson, CEO of Varian. "Of particular note was the fast pace of customer demand for some of our newer information rich detection products, including our new routine 400MHz NMR and some of our mass spec systems. We are in a position to deliver another record year." The company is planning on consolidating its nuclear magnetic resonance (NMR) and mass spectrometry (MS) instruments operations - keeping all their 'magnet' activities under one roof. The move will lead to between 40 and 60 job losses as Varian moves its NMR facilities from Palo Alto, California, US, with its MS operations already located in Walnut Creek 510 miles to the north. "The new facility will enable us to develop and manufacture new generations of NMR and mass spec instruments more quickly and efficiently," said Martin O'Donoghue, Varian's senior vice president of Scientific Instruments. Varian will build a new 45,000 sq. ft. building and remodel an existing building to house the new centre and predicts that restructuring costs will be in the range of $9.5m to $14.5m Strong growth in genetic screening and medical imaging saw PerkinElmer off to a strong start to the year with the company's increased focus on cellular science highlighting the pharmaceutical industry's interest in biotechnological drug development strategies. The company saw sales grow 13 per cent to $402.9m for Q1 2007 with the Life and Analytical Sciences division having increased revenues of $299m - up 14 per cent on last year's figure of $261m. However, profits for the quarter fell 38 per cent to $14.7m from $23.6m for the same period a year ago with the cost of sales increasing 13 per cent to $242m (from $213m) and restructuring charges due to the company's recent acquisitions costing $4.4m. R&D spending also increased nearly 30 per cent to $29.3m (7.3 per cent of sales) from $22.8m (6.4 per cent of sales). "We were pleased to deliver another quarter of double-digit revenue growth as we continue to strengthen our growth platforms through increased R&D, marketing, acquisitions and capital investments," said Gregory Summe, PerkinElmer CEO. "We expect our momentum to continue through the year, as our new products and services continue to make a greater contribution to our overall revenue." Sales of real-time PCR equipment and mass spectrometers helped drive Applied Biosystems (ABI) continued growth with the company's consumables business doing very well. The company recorded third quarter net revenues of $529.9m, up 8 per cent over last years $490.7m. Net income for the year was down to $75.5m from $124.4m the previous year which was boosted by tax benefits totalling $63.3m. "In the fiscal third quarter we continued to see growth across our three strategic product categories - with modest growth in DNA sequencing and double-digit increases in real-time PCR and mass spectrometry. We are particularly pleased with the strong revenue gains resulting from our focus on consumables," said Tony L. White, CEO of ABI's parent company Applera Corp. While sales of real-time PCR goods increased 13 per cent to $183.3m and mass spectrometers rose 12 per cent to $127.3m, sales of core PCR and DNA synthesis instruments and consumables decreased by 9 per cent to $46.9m. This was compensated for by the 20 per cent growth in sales of other product lines (including consumables) to $31.7m. R&D costs accounted for $54.4m (10 per cent of sales), up from $48m the previous year.
Laboratory equipment manufacturers are having a good start to 2007, with Thermo Fisher Scientific, Applied Biosystems, Waters, Varian and PerkinElmer nearly all achieving double-digit revenue growth.