Thermo Fisher 4Q profit falls

Thermo Fisher 4Q profit falls

	Published : Thu, 08 Feb 2007 17:20 By : Agencies Print this Story

BOSTON (AFX) - Thermo Fisher Scientific Inc. said Thursday its fourth-quarter profit fell sharply on costs from a recently completed deal that more than doubled the newly renamed company's revenue and work force.

But the profit at the maker of scientific instruments and laboratory supplies beat Wall Street expectations. And the company's fourth-quarter revenue grew 11 percent from a year ago, had Thermo Electron and Fisher Scientific International been combined in both comparison periods.

The company's operating income rose 21 percent on that basis, and Thermo Fisher Scientific's top executive reaffirmed expectations that the company will achieve its goal of $75 million in costs savings this year from the $10.6 billion deal completed Nov. 9. Savings are expected from streamlining manufacturing, sales and delivery operations and eliminating duplicate jobs between the merger partners' administrative operations.

'The revenue growth was in line with growth in their sector, and they outperformed in that those synergies are starting to show up,' said Quintin Lai, an analyst with Robert W. Baird & Co. 'This result kind of springboards them to achieving what they said they could do in 2007.'

Waltham-based Thermo Fisher Scientific said its net income for the three months ended Dec. 31 was $25.3 million, down 55 percent from $56.4 million in the previous year's fourth quarter -- a comparison in accordance with accounting rules that measure the profit of the former Thermo Electron as a standalone company in the final quarter of 2005 versus the latest quarter. In the latest period, Fisher Scientific's results were added in for the quarter's final seven weeks after the deal closed.

The profit fell to 8 cents per share from 34 cents a share a year ago -- a comparison clouded because the company had nearly twice as many shares outstanding in the latest quarter compared with a year ago.

The latest quarter's profit also was hurt by a $125 million charge from costs from the merger, which was structured as a reverse stock swap. The smaller 11,000-employee Thermo acquired Hampton, N.H.-based Fisher Scientific, which had 19,500 workers.

Revenue more than doubled to $1.67 billion in the most recent quarter compared with $741 million in the fourth quarter of 2005, with $849 million of revenue in the latest period coming from Fisher Scientific's operations after the deal closed.

Excluding one-time charges and gains, Thermo Fisher Scientific's fourth-quarter profit totaled 57 cents per share, up from 47 cents per share a year ago. The latest result beat the consensus estimate of analysts surveyed by Thomson Financial, who expected a profit of 53 cents per share, on average.

Shares of Thermo Fisher Scientific fell 55 cents to $49.16 in morning trading on the New York Stock Exchange after briefly rising to a new 52-week high of $49.90 earlier in the session.

Thermo Fisher Scientific says it has recently enjoyed strong demand for scientific supplies and analytical instruments from its customers, including pharmaceutical firms, government research labs, hospitals and universities.

The company expects the merger will yield $200 million in annual savings within three years.

'We are well on our way to achieving the $75 million of synergies we identified for 2007,' said President and CEO Marijn Dekkers.

Thermo Fisher Scientific reiterated its forecast for 2007 adjusted earnings of $2.35 to $2.45 per share, and full-year revenue of $9.4 billion to $9.5 billion -- in line with analysts' estimates of a profit of $2.41 per share and $9.47 billion in revenue.

The company's products are branded under the names Fisher Scientific and Thermo Scientific, competing against rivals such as Agilent Technologies Inc., Beckman Coulter Inc. and Becton, Dickinson & Co.