Thermo Fisher Scientific (TMO)
Q3 2012 Earnings Call
October 24, 2012 8:30 am ET
Kenneth J. Apicerno - Vice President of Investor Relations and Treasurer
Marc N. Casper - Chief Executive Officer, President, Director, Member of Strategy & Finance Committee and Member of Science & Technology Committee
Peter M. Wilver - Chief Financial Officer and Senior Vice President
Jonathan P. Groberg - Macquarie Research
Jon Davis Wood - Jefferies & Company, Inc., Research Division
Daniel L. Leonard - Leerink Swann LLC, Research Division
Ross Muken - ISI Group Inc., Research Division
Daniel Brennan - Morgan Stanley, Research Division
Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division
Derik De Bruin - BofA Merrill Lynch, Research Division
Amit Bhalla - Citigroup Inc, Research Division
Doug Schenkel - Cowen and Company, LLC, Research Division
Jeffrey T. Elliott - Robert W. Baird & Co. Incorporated, Research Division
Daniel Arias - UBS Investment Bank, Research Division
Eric Criscuolo - Mizuho Securities USA Inc., Research Division
Isaac Ro - Goldman Sachs Group Inc., Research Division
Sung Ji Nam - Cantor Fitzgerald & Co., Research Division
Tycho W. Peterson - JP Morgan Chase & Co, Research Division
Previous Statements by TMO
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Kenneth J. Apicerno
Thank you. 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 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 November 23, 2012. A copy of the press release of our 2012 third quarter earnings and future expectations is available on our website under the heading Financial Results.
So before we begin, I'll cover the brief -- briefly just the 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 quarterly report on Form 10-Q for the quarter ended June 30, 2012, under the caption Risk Factors, which is on file with the Securities and Exchange Commission and also available on 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 third quarter 2012 earnings and future expectations and also in the Investors section of our website under the heading Financial Information.
So with that, I'll now turn the call over to Marc.
Marc N. Casper
Thanks, Ken, and good morning, everyone. Thank you for joining us today on our third quarter earnings call. I'm very pleased to report that we continued our growth momentum from the first half of the year into Q3. Our teams executed well to deliver record third quarter revenue and EPS by continuing to focus on our initiatives to grow the business and gain market share. Our strong results so far this year positions us to meet our goals for 2012 and give us a solid foundation as we move into 2013. Later in the call, I'll share a few thoughts on our updated guidance as we close out the year. But first, let me focus on the quarter starting with our financial highlights, then moving onto what we saw in our end markets and ending with some great examples of how we're positioning the company for continued growth and success.
So first the financials. As I mentioned, we delivered record third quarter adjusted EPS with an 11% increase over 2011. Our revenue, another record performance, grew by 5% over last year. Finally, our adjusted operating income also increased 5% in Q3. Our results highlight how well we've continued to navigate the economic environment. Our strong top line performance, solid operational discipline and effective capital deployment have resulted in adjusted EPS growth of 20% over the first 9 months of the year. The dynamics of our end markets have played out as we expected. We planned accordingly, we executed well, and we set ourselves up to deliver a very strong year.
Let's talk about our growth for a minute and where it's coming from, and I'll share a few observations. First, our value proposition is really making a difference for our customers and puts us in a unique position in our industry. We have innovative, high-impact products through our Thermo Scientific brand. We have a leading channel to market through Fisher Scientific, and we have the most comprehensive service capabilities through Unity Lab Services. This differentiated offering is what we bring to our customers when they work with Thermo Fisher Scientific.
I spend a significant amount of my time meeting with our customers. I think it's one of the most important things that I do. I recently visited several of our largest European accounts, serving markets ranging from pharma to industrial. It was clear from my discussions that they appreciate the value we provide as a strategic partner, and they are looking to us to help them achieve their goals in the current environment. Second, our global presence is a key advantage in terms of market penetration and cost efficiency. As you know, we're expanding our presence in emerging markets, and we had another strong quarter in the APAC region. China came in with better than 20% growth again this quarter. The team there is doing fantastic work, and we plan to have the grand opening for our new life sciences consumable plant in Suzhou next month. I'll mention here that we had excellent growth in the quarter in South Korea and good growth in India as well. In fact, I just came back from visiting our operations in Mumbai. For us, India is about a $2 billion addressable market. We're very excited about the long-term opportunities that we have there in industries such as a pharmaceutical health care, food safety and the environment.