Thermo Fisher reported a better-than-expected second-quarter 2015 with adjusted EPS and revenues exceeding the respective Zacks Consensus Estimate.
Thermo Fisher reported abetter-than-expected second-quarter 2015 with adjusted EPS and revenuesexceeding the respective Zacks Consensus Estimate. However, the top line wasaffected year over year by the impact of unfavorable foreign exchange rates anddivestitures. Despite that, Thermo Fisher increased its full-year 2015 revenueguidance reflecting strong operational performance as well as ample scope forimprovement even amid the present challenges.
According to the company, it is on track todeliver revenue and cost synergy targets from the Life Technologiesintegration. At the end of 2015, the company expects to deliver $130 millionworth of cost synergy benefits, a $5 million increase from the earlier targetprimarily because of accelerating realization of head count and sourcingsynergies. The company is also confident of its overall three-year synergytarget which had been raised from $300 million to $350 million.
Thermo Fisher expects revenue synergies toaccelerate through 2015 and hence is confident to achieve the full-year 2015guidance of $60 million in revenue synergies and $20 million in adjustedoperating income pull-through. Year to date, revenue synergies total $25million, lower than the midpoint of the target. However, the company expects aramp up in this regard over the coming quarters.
Thermo Fisher has carried out multipleacquisitions that have added complementary technologies, expanded its presencein high-growth markets, and generated cost and revenue synergies therebycreating shareholder value. Apart from boosting revenue accretion, these dealshave historically benefited the company’s operating margin while also resultingin tax synergies.
The company is optimistic about its recentdevelopments which include a set of new product launches including OrbitrapFusion LumosTribrid mass spectrometer and Q Exactive GC-MS/MS; the impending$400 million acquisition of Alfa Aesar and increased presence in emergingmarkets.