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Thermo Fisher Scientific's CEO Discusses Q4 2011 Results - Earnings Call Transcript

You will recall from our Analyst Meeting last year that I said our priority was to consistently deliver strong adjusted EPS growth, and we clearly met that objective again in 2011. Before I cover our achievements for the full year, let's turn to the fourth quarter financials and I'll try to give you a sense of the playing field as we see it based on how our businesses closed out the year.

As you read in our press release, adjusted EPS for Q4 grew 23% to a record $1.18. Revenues in the fourth quarter increased 15% to a record $3.13 billion. We also expanded our adjusted operating margin by 100 basis points in the quarter to 18.9%.

We ended the year on a strong note and I'm especially pleased with our top line growth. We came in just above the high end of our expectations due to 3 reasons. First, our teams executed well against their plans. Second, we benefited from early traction on the additional share gain initiatives we put in place in the third quarter, which I'll highlight later in my remarks. And third, while the market conditions played out pretty much as we expected, we did see sequential improvement in the academic and government customer segment later in the quarter.

Let me take a few minutes to provide an overview of what we saw in our end markets in more detail. Let's start with academic and government. As you recall, we saw a significant slowdown in this end market in Q3. Uncertainty around the future of NIH budgets, as well as the budget crisis in many European countries was causing many of our customers to put their buying decisions on hold.

In Q4, although conditions got sequentially better, the market was still relatively weak overall. Once the U.S. federal budget for 2012 was passed, with the small increase for NIH, we believe that our customers gain more confidence and that some pent-up demand kicked in late in the quarter, especially in spending for laboratory consumables.

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