8-KEarnings & ResultsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Financial Results (Feb 2, 2006)

Filed February 2, 2006For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) reported its fourth quarter and full-year 2005 financial results on February 2, 2006. The company demonstrated strong top-line growth, with fourth-quarter revenues increasing by 21% year-over-year to $741 million, driven by a significant 19% contribution from acquisitions. Full-year revenues grew 19% to $2.63 billion. While GAAP diluted EPS saw a decrease in the fourth quarter due to prior-year tax benefits, the company highlighted strong performance on an adjusted basis. Adjusted diluted EPS grew 29% in the fourth quarter to $0.49 and 24% for the full year to $1.55. This growth was accompanied by significant margin expansion, with adjusted operating margin increasing by 290 basis points to 16.0% in the fourth quarter, reflecting improved pricing, productivity initiatives, and acquisition synergies. The company also reported a substantial 42% increase in cash flow from continuing operations for the fourth quarter.

Key Highlights

  • 1Thermo Fisher Scientific reported a 21% increase in fourth-quarter 2005 revenue to $741 million, with acquisitions contributing 19% to this growth.
  • 2Adjusted diluted Earnings Per Share (EPS) saw a robust 29% increase in Q4 2005, reaching $0.49.
  • 3Adjusted operating margin expanded significantly by 290 basis points to 16.0% in the fourth quarter, indicating improved profitability.
  • 4Cash flow from continuing operations surged by 42% in the fourth quarter.
  • 5The company successfully integrated nearly $1 billion in strategic acquisitions made during 2005.
  • 6Thermo Fisher opened customer demonstration centers in China and India to expand its global reach.
  • 7The company provided positive guidance for 2006, expecting adjusted EPS between $1.75 and $1.80, representing a 13-16% increase.

Frequently Asked Questions

Revenue growth in the fourth quarter of 2005 was primarily driven by acquisitions, which contributed 19% to the total revenue increase of 21%. Strong performance in industrial markets, particularly in commodity materials and environmental monitoring, also contributed to the growth, alongside continued good progress from life sciences customers.

The GAAP diluted EPS for the fourth quarter of 2005 was $0.34, down from $0.74 in the prior year. This decrease was primarily due to tax benefits related to divested businesses that were recognized in the fourth quarter of 2004, which artificially boosted the prior year's GAAP EPS.

The company reported significant margin expansion. Adjusted operating margin rose by 290 basis points to 16.0% in the fourth quarter of 2005, compared to 13.1% in the prior year. This improvement was attributed to new products, pricing initiatives, productivity programs, and synergies from recent acquisitions.

Thermo Fisher provided a positive outlook for 2006, projecting adjusted EPS in the range of $1.75 to $1.80 (excluding the impact of stock option expensing). This represents an expected increase of 13% to 16% over the strong 2005 results. Revenue is expected to be between $2.78 billion and $2.83 billion, a 6% to 8% increase year-over-year.