OREANDA-NEWS. Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today reported its financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter and Full Year 2015 Highlights

  • Grew fourth quarter adjusted earnings per share (EPS) by 7% to $2.12 and full year adjusted EPS by 6% to $7.39.
  • Increased fourth quarter revenue by 4% to $4.65 billion.
  • Expanded fourth quarter adjusted operating margin by 40 basis points to 23.2%.
  • Launched significant new products in 2015 for research, clinical and applied markets, highlighted by the QuantStudio 3 and 5 qPCR systems, Orbitrap Fusion Lumos Tribrid mass spectrometer and the Ion S5 and S5 XL next-generation sequencing instruments.
  • Leveraged increasing scale in Asia-Pacific and emerging markets to deliver strong growth, led by outstanding performance in China and significant contributions from India and South Korea.
  • Successfully integrated the Life Technologies acquisition, which strengthened our customer value proposition and accelerated growth.
  • In 2015, deployed nearly $700 million to expand our bioproduction and laboratory chemicals offerings through acquisitions of Advanced Scientifics, Inc. and Alfa Aesar; also repurchased $500 million of stock.
  • Reduced debt by approximately $2.0 billion in 2015 and achieved target leverage ratio.
  • After year end, announced agreement to acquire Affymetrix for $1.3 billion to strengthen leadership in biosciences and genetic analysis.

Adjusted EPS, adjusted operating income, adjusted operating margin and free cash flow are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Use of Non-GAAP Financial Measures.”

“I’m pleased to report that every business segment finished the year strong, which contributed to an outstanding year for Thermo Fisher in a challenging macro-environment,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “We executed well to extend our long track record of strong adjusted EPS growth and delivered increased value to our customers to achieve excellent top-line results.

“Our strong performance in 2015 demonstrates the success of our growth strategy, which is based on technology innovation, scale in Asia-Pacific and emerging markets, and our unique customer value proposition. During the year, we launched high-impact products across our technology portfolio that strengthen our leadership positions and create new avenues for growth. We expanded our capabilities in high-growth regions, such as Singapore, Southeast Asia and the Middle East, while delivering outstanding growth in China. We also successfully integrated Life Technologies, leveraging our combined portfolios and commercial strengths to create tremendous value for our customers.

“In terms of capital deployment, we invested about $1.4 billion during 2015 to expand our customer offerings through strategic M&A and return capital through stock buybacks and dividends. At the same time, we de-levered ahead of our original plan and kicked off 2016 with our agreement to acquire Affymetrix.”

Casper concluded, “Our strong finish in the fourth quarter contributed to a great year overall, and sets us up to deliver a successful 2016.”

Fourth Quarter 2015

For the fourth quarter of 2015, adjusted EPS grew 7% to $2.12, versus $1.99 in the fourth quarter of 2014. Revenue for the quarter grew 4% to $4.65 billion in 2015, versus $4.49 billion in 2014. Organic revenue growth was 7%; acquisitions increased revenues by 1% and currency translation reduced revenue by 4%. Adjusted operating income for the fourth quarter of 2015 increased 5% compared with the year-ago quarter, and adjusted operating margin expanded to 23.2%, compared with 22.8% in the fourth quarter of 2014.

GAAP diluted EPS for the fourth quarter of 2015 was $1.50, versus $1.49 in the same quarter last year. GAAP operating income for the fourth quarter of 2015 increased 8% to $690 million, compared with $639 million in 2014. GAAP operating margin increased to 14.8%, compared with 14.2% in the fourth quarter of 2014.

Full Year 2015

For the full year 2015, adjusted EPS grew 6% to $7.39, versus $6.96 in 2014. Revenue for 2015 grew to $16.97 billion, compared with $16.89 billion a year ago. Organic revenue grew 5%; acquisitions, net of divestitures, increased revenue by 1% and currency translation reduced revenue by 6%. Adjusted operating income for 2015 increased 3% compared with 2014, and adjusted operating margin expanded 60 basis points to 22.5%, compared with 21.9% a year ago.

GAAP diluted EPS for 2015 was $4.92, versus $4.71 in 2014. GAAP operating income for 2015 decreased to $2.34 billion, compared with $2.50 billion a year ago. GAAP operating margin decreased to 13.8%, compared with 14.8% in 2014. GAAP results reflect gains from the sale of businesses in 2014.

Annual Guidance for 2016

The company will provide 2016 financial guidance on its earnings conference call this morning at 8:30 a.m. EST.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the company’s four business segments, as highlighted below. Year-over-year results were negatively affected by the impact of foreign currency exchange rates.

Life Sciences Solutions Segment

In the fourth quarter of 2015, Life Sciences Solutions Segment revenue grew to $1.21 billion, compared with revenue of $1.19 billion in the fourth quarter of 2014. Segment adjusted operating margin increased to 31.6%, versus 30.8% in 2014.

For the full year 2015, Life Sciences Solutions Segment revenue grew to $4.44 billion, compared with revenue of $4.20 billion in 2014. Segment adjusted operating margin rose to 30.1% in 2015 compared with 29.0% a year ago.

Analytical Instruments Segment

Analytical Instruments Segment revenue increased 3% to $925 million in the fourth quarter of 2015, compared with revenue of $902 million in the fourth quarter of 2014. Segment adjusted operating margin grew to 22.1%, versus 20.2% in the 2014 quarter.

For the full year 2015, Analytical Instruments Segment revenue was $3.21 billion, compared with revenue of $3.25 billion in 2014. Segment adjusted operating margin rose to 19.1%, versus 17.9% in 2014.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue in the fourth quarter increased to $865 million in 2015, compared with revenue of $863 million in the fourth quarter of 2014. Segment adjusted operating margin was 26.2%, versus 27.1% in the 2014 quarter.

For the full year 2015, Specialty Diagnostics Segment revenue was $3.24 billion, compared with revenue of $3.34 billion in 2014. Segment adjusted operating margin was 26.9%, versus 2014 results of 27.4%.

Laboratory Products and Services Segment

In the fourth quarter of 2015, Laboratory Products and Services Segment revenue grew 8% to $1.82 billion, compared with revenue of $1.68 billion in the fourth quarter of 2014. Segment adjusted operating margin increased to 14.7%, versus 14.5% in the 2014 quarter.

For the full year 2015, Laboratory Products and Services Segment revenue increased 1% to $6.66 billion, compared with revenue of $6.60 billion in 2014. Segment adjusted operating margin increased to 15.0%, versus 14.9% in 2014.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving science, with revenues of $17 billion and more than 50,000 employees in 50 countries. Our mission is to enable our customers to make the world healthier, cleaner and safer. We help our customers accelerate life sciences research, solve complex analytical challenges, improve patient diagnostics and increase laboratory productivity. Through our premier brands – Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and Unity Lab Services – we offer an unmatched combination of innovative technologies, purchasing convenience and comprehensive support.