Thermo Fisher Scientific (TMO)
Q2 2011 Earnings Call
July 27, 2011 8:30 am ET
Peter Wilver - Chief Financial Officer and Senior Vice President
Marc Casper - Chief Executive Officer, President, Director, Member of Strategy & Finance Committee and Member of Science & Technology Committee
Kenneth Apicerno - Vice President of Investor Relations and Treasurer
Dane Leone - Macquarie Research
Nandita Koshal - Barclays Capital
Ross Muken - Deutsche Bank AG
Steve Willoughby - Cleveland Research Company
Dan Arias - UBS
Tycho Peterson - JP Morgan Chase & Co
Quintin Lai - Robert W. Baird & Co. Incorporated
Paul Knight - Credit Agricole Securities (USA) Inc.
Doug Schenkel - Cowen and Company, LLC
Peter Lawson - Mizuho Securities USA Inc.
Isaac Ro - Goldman Sachs Group Inc.
Jon Wood - Jefferies & Company, Inc.
Amit Bhalla - Citigroup Inc
Previous Statements by TMO
» Thermo Fisher Scientific's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Thermo Fisher Scientific's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Thermo Fisher CEO Discusses Q3 2010 Results - Earnings Call Transcript
Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific Second Quarter 2011 Earnings Conference Call. I would like to introduce our moderator for the call, Mr. Kenneth Apicerno, Vice President, Investor Relations. Mr. Apicerno, you may begin the call.
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, our 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 August 19, 2011. A copy of the press release of the second quarter 2011 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 April 2, 2011, under the caption Risk Factors, which is on file with the Securities and Exchange Commission and 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 second quarter 2011 earnings and future expectations, and also in the Investors section of our website under the heading Financial Information.
With that, I'll now turn the call over to Marc.
Thanks, Ken. Good morning, everyone, and thank you for joining us for our second quarter 2011 earnings call. We're pleased to deliver another quarter of solid performance. As we discussed at the Analyst Meeting back in May, we're focused on consistently delivering strong adjusted EPS growth, and we continued our excellent track record with 22% growth in Q2. I want to thank our teams across the company who worked hard to meet this goal and contributed to our outstanding results. Our commitment to investing on new products and emerging markets is clearly paying off and our performance in Q2 positions us well to achieve our ambitious goals for the year.
Let me get right into our second quarter financial highlights. Our adjusted EPS was $0.99, a second quarter record. We also achieved record revenue in the quarter with a 12% increase to $2.90 billion. Our adjusted operating margin increased 40 basis points to 17.6%, reflecting our continued investment to develop new products, expanding growing markets, and strengthen our commercial capabilities worldwide.
You heard me talk about our EPS growth strategy in the context of our 3 key drivers. They are top line growth to continuous new product innovation and expansion in emerging markets; operational excellence; and deploying our capital to create shareholder value. We run the company by focusing on these key drivers, so I'll continually use them as a framework for my comments around the highlights this quarter.
First, let me cover revenue growth. As I just mentioned, we had double-digit revenue growth in the quarter, and I'll give you a little color on which businesses stood out in terms of their contribution to our top line performance. Similar to what we've seen for the past few quarters, we continue to reap the benefits of strong industrial and applied markets served by a number of our businesses. In particular, our Process Instruments business performed very well across the board, from short lead time products such as our handheld instruments to our longer lead time systems for metals, mining and commodity material applications. Our leading ion chromatography business which we gained with the Dionex acquisition performed very well in the quarter, especially in applied markets.
We also continue to see strong demand for our clinical diagnostic products, specifically our assays for drugs-of-abuse testing and our biomarker tests, which I'll talk a little more about in a few moments.
Moving to pharma and biotech. Our Biopharma Services business had a very strong quarter. We have the scale and depth of capabilities to offer outsourcing for clinical trials manufacturing, packaging and distribution. This enables our customers to safely and efficiently deliver clinical trial materials to investigators and patients worldwide.