10-QPeriod: Q3 FY2016

THERMO FISHER SCIENTIFIC INC. Quarterly Report for Q3 Ended Jul 2, 2016

Filed August 5, 2016For Securities:TMO

Summary

Thermo Fisher Scientific Inc. reported solid financial results for the quarter ending July 2, 2016. Total revenues increased by 6% year-over-year to $4.54 billion, driven by growth across all segments, particularly Life Sciences Solutions and Laboratory Products and Services. Operating income also saw a healthy increase of 7% to $638 million, reflecting effective cost management and productivity improvements. The company continues its strategic acquisition path, announcing plans to acquire FEI Company for approximately $4.2 billion, further strengthening its Analytical Instruments segment. This follows the recent acquisition of Affymetrix, Inc. for $1.34 billion. These strategic moves highlight Thermo Fisher's commitment to expanding its market leadership and technological capabilities, which is expected to drive future growth and shareholder value.

Financial Highlights

56 data points
Beta

Revenue

$4.54B

45.8% Gross Margin

Net Income

$517.00M

11.4% Net Margin

EPS (Diluted)

$1.30

Total Assets

$42.25B

Cash & Equivalents

$663.10M

Free Cash Flow

$798.80M

Financial Statements
Beta
Revenue$4.54B
Cost of Revenue$2.04B
Gross Profit$2.08B
R&D Expenses$182.40M
SG&A Expenses$1.22B
Operating Expenses$3.90B
Operating Income$637.60M
Interest Expense$118.80M
Net Income$517.00M
EPS (Basic)$1.31
EPS (Diluted)$1.30
Shares Outstanding (Basic)393.90M
Shares Outstanding (Diluted)396.70M

Key Highlights

  • 1Total revenues increased by 6% to $4.54 billion for the quarter ended July 2, 2016, compared to the prior year period.
  • 2Operating income grew by 7% to $638 million, indicating improved profitability and operational efficiency.
  • 3The company announced a significant acquisition of FEI Company for $4.2 billion, expanding its Analytical Instruments segment.
  • 4Life Sciences Solutions and Laboratory Products and Services segments showed strong revenue growth, up 13% and 6% respectively.
  • 5Net income for the quarter was $516.6 million, a slight increase from $511.6 million in the same period last year.
  • 6Cash flow from operating activities for the six months ended July 2, 2016, increased significantly to $1.18 billion from $845 million in the prior year period.

Frequently Asked Questions

Thermo Fisher Scientific reported an increase in total revenues to $4.54 billion and operating income to $638 million for the quarter ended July 2, 2016. This growth was driven by strong performance across its business segments and strategic acquisitions.

The company highlighted its ongoing strategy of augmenting internal growth with complementary acquisitions. A major development is the announced acquisition of FEI Company for approximately $4.2 billion, aimed at strengthening its Analytical Instruments segment. The recent acquisition of Affymetrix, Inc. is also noted as a significant move to enhance its Life Sciences Solutions portfolio.

The company's liquidity appears sufficient, supported by $663 million in cash and cash equivalents and strong operating cash flow of $1.18 billion for the first six months of 2016. While significant debt exists due to acquisitions, the company has access to revolving credit facilities and committed financing for the pending FEI acquisition, indicating adequate resources to meet its obligations.

The Life Sciences Solutions segment demonstrated robust growth (13% year-over-year), as did Laboratory Products and Services (6% year-over-year). Analytical Instruments and Specialty Diagnostics also showed positive revenue growth, indicating a balanced performance across the company's diverse portfolio. Management expects continued demand from pharmaceutical and biotech industries.