Thermo Electron reports continued 3Q strong growth

By Wai Lang Chu

- Last updated on GMT

Related tags Cent European commission Revenue Generally accepted accounting principles

Thermo Electron has continued to show strong growth in the third
quarter 2006 buoyed on by strong returns in its mass spectrometry
business and progress in its Triple Quad technology.

"We had another strong quarter, as we continue to deliver considerable growth in revenues, operating income and adjusted EPS,"​ said Marijn Dekkers, president and chief executive officer of Thermo Electron.

"New products sparked growth across our business segments. In Life and Laboratory Sciences, demand for our leading mass spectrometry technologies for proteomics and small molecule research remained very strong and we continue to enhance our portfolio, having launched our latest-generation LTQ FT Ultra system in the quarter."

The analytical instrument specialists reported revenue growth of 7 per cent to $725m (€573m) in the third quarter of 2006, compared with $679m in the 2005 quarter.

GAAP operating income in the third quarter of 2006 rose 21 per cent, and GAAP operating margin for the period was 10.4 per cent versus 9.1 per cent a year ago.

Life and Laboratory Sciences segment revenues grew 5 per cent in the third quarter of 2006 to $543m, compared with $516m in 2005.

GAAP operating income for the segment increased 24 per cent in the quarter, and GAAP operating margin increased to 12.9 per cent, from 10.9 per cent in the year-ago period.

Adjusted operating income rose 13 per cent in the 2006 quarter, and adjusted operating margin increased to 18.3 per cent, compared with 17.1 per cent in 2005.

As reported previously in Drugresearcher, the US Federal Trade Commission, with the agreement that Fisher sells its $17m Genevac business, cleared Thermo's pending merger with Fisher Scientific.

"Our last step in completing the merger is to obtain clearance from the European Commission (EC), which we expect to receive based on our offer to sell the same business,"​ said Dekkers.

"The new deadline for the EC to respond to that offer is now November 9, which is our anticipated closing date. There couldn't be a better time for us to complete this historic merger, as both companies prepare to join forces from a position of strength."

The company sought to increase its full-year 2006 adjusted EPS guidance to a range of $1.74 to $1.77, from a previous estimate of $1.68 to $1.73.

Thermo expected this to result in an 18 to 20 per cent increase over its pro forma 2005 results, as if stock option expense had been recorded for that year.

Expected increased revenues of $2.88 to $2.90bn in 2006 are now likely, versus the $2.81 to $2.86bn originally estimated, for 9 to 10 per cent growth over 2005.

"Assuming that we complete the merger with Fisher Scientific on November 9, we expect accretion to our adjusted EPS of $0.01 to $0.03 in the fourth quarter,"​ said Dekkers.

"We plan to update our 2007 guidance for the new combined company in mid-December."

Related topics Preclinical Research

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