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Thermo Fisher Scientific (TMO)
Q4 2010 Earnings Call
February 02, 2011 8:30 am ET
Peter Wilver - Chief Financial Officer and Senior Vice President
Kenneth Apicerno - Vice President of Investor Relations and Treasurer
Marc Casper - Chief Executive Officer, President and Director
Derik De Bruin - UBS Investment Bank
Dan Leonard - First Analysis
Ross Muken - Deutsche Bank AG
Jonathan Groberg - Macquarie Research
Peter Lawson - Mizuho Securities USA, Inc.
Tycho Peterson - JP Morgan Chase & Co
Daniel Leonard - First Analysis
Quintin Lai - Robert W. Baird & Co. Incorporated
Paul Knight - Credit Agricole Securities (USA) Inc.
Marshall Urist - Morgan Stanley
Isaac Ro - Goldman Sachs Group Inc.
Jon Wood - Jefferies & Company, Inc.
Charles Butler - Barclays Capital
Previous Statements by TMO
» Thermo Fisher CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Thermo Fisher Scientific Q2 2010 Earnings Call Transcript
» Thermo Fisher Scientific, Inc. Q1 2010 Earnings Call Transcript
Good morning, and thank you for joining us. On the call with me today is Marc Casper, our President and Chief Executive Officer; and Pete Wilver, Senior Vice President and Chief Financial Officer.
Please note that this call is being webcast live and will be archived on the Investors section of our website, thermofisher.com, under the heading Webcasts and Presentations, until March 4, 2011. A copy of the press release of our fourth quarter 2010 earnings and future expectations is available on our website under the heading Financial Results.
So before we begin, let me briefly cover our Safe Harbor statement. Various remarks that we may make about the company's future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's Form 10-Q for the quarter ended October 2, 2010, under the caption Risk Factors, which is on file with the Securities and Exchange Commission and available in the Investors section of our website under the heading SEC Filings.
While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.
Also during the call, we'll be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in the press release of our fourth quarter 2010 earnings and future expectations and also in the Investors section of our website under the heading Financial Results.
So with that, I'll now turn the call over to Marc.
Thanks, Ken. Good morning, everyone, and thank you for joining us for our recap of the 2010 fourth quarter and full year. On the call, we also look forward to outlining our guidance for 2011.
Let me start by saying that I'm pleased to tell you that we achieved our growth goals for the year. We outlined our key objectives back in May at our Analyst Meeting, all in support of our primary goal, to accelerate EPS growth.
As you saw in our press release, we delivered record adjusted EPS in 2010, exceeding the high end of our annual guidance by $0.04. We executed well on our operating plans while continuing to make the strategic investments and technology development in emerging markets that we believe will contribute to an even stronger future for Thermo Fisher. This combination, in addition to our ability to deploy capital, gives us a competitive advantage and reinforces our position as the industry leader. We expect to continue our trend of delivering excellent EPS growth, as you can see in our 2011 guidance, which I'll cover later in my remarks.
Before I discuss our performance for the full year in more detail, let me touch on the highlights of the fourth quarter. We reported record adjusted EPS in the quarter with a 10% increase to $1 per share. We generated good adjusted operating margin expansion coming in at 40 basis points improvement to 18.4%.
I'm also pleased to report that we had strong double-digit growth in Q4 in China and India. In fact, in the quarter, China became our third largest country in terms of revenue behind the U.S. and Germany. We also saw continued strengthening of industrial markets in the quarter and delivered strong growth in applied markets such as environmental and food safety.
Turning to the year in a bit more detail, adjusted earnings per share grew 17% to a record $3.57, versus $3.05 in 2009. As I did last quarter, I'd like to focus on the three key drivers of our 2010 EPS performance. One is top line revenue growth, the second is operational excellence and the third is disciplined capital deployment.
So first, let me cover the top line revenue growth. Revenues for the year grew 7% to $10.8 billion compared with $10.1 billion a year ago. In our Analytical Technologies segment, our Scientific and Process Instruments businesses benefited particularly from strength in applied markets and the global industrial recovery. Our new products in molecular spectroscopy and handheld instruments really hit the mark with rapid adoption by our customers for QA/QC testing and security screening applications.