Thermo Fisher Scientific, Inc. (NYSE:TMO) Q3 2019 Earnings Conference Call - Final Transcript

Oct 23, 2019 • 08:30 am ET


Thermo Fisher Scientific, Inc. (NYSE:TMO) Q3 2019 Earnings Conference Call - Final Transcript


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Marc N. Casper

the opportunities we had to gain share with our customers. We have a lot of highlights to cover this morning, so let me begin with an overview of our Q3 financial performance.

First, we delivered excellent growth in adjusted EPS achieving a 12% increase to $2.94 per share. Our revenue in Q3 increased to $6.27 billion, growing 6% year-over-year. Our adjusted operating income increased 9% to $1.42 billion and we expanded our adjusted operating margin by 60 basis points to 22.7% in the third quarter. So by all measures, it was another excellent quarter for us.

Now, I'll give you more color on the quarter, starting with an overview of our performance in our end markets. In Q3 market conditions continued to be strong and we delivered excellent growth. In pharma and biotech, we had very strong performance in Q3, we delivered another quarter of double-digit growth with strength across all of our businesses serving this end market.

We continued our excellent momentum here by leveraging our unique value proposition to help our customers accelerate their innovation pipelines and increase productivity.

In academic and government, we delivered mid single-digit growth in Q3, and so good growth in this end market across all of our major geographies.

Turning to industrial and applied, as we expected, growth here was flat in the quarter due to the very strong growth we delivered in Q3 last year in our industrially focused businesses. It was good to see continued strong demand in our chromatography and mass spectrometry business from this customer set.

Finally, in diagnostics and health care, we grew in the high single-digits in Q3, We saw broad-based growth in our businesses serving this end market led by transplant diagnostics and immunodiagnostics.

So in summary, our teams continue to successfully execute our growth strategy. We are clearly gaining market share and that's reflected in our strong results.

That's a good segue to a more detailed discussion of our growth strategy, which as you know, consists of three elements. Continuously developing high impact innovative new products, leveraging our scale in the high growth and emerging markets and delivering a unique value proposition to our customers. We continue to make great progress in each of these areas in Q3 and I'm going to cover some of the highlights.

First, in terms of new product innovation, we're focused on creating significant value from our leading R&D investments. We're committed to helping our customers advance their work by continuously raising the bar on speed, accuracy and ease of use.

Q3 was another productive quarter for innovation and we kicked it off with a strong showing a two major industry conferences in early August. First, at the American Association for Clinical Chemistry, we launched new analytical instruments for the diagnostic laboratory that ultimately help clinicians make better decisions for their patients.

Our Thermo Scientific portfolio of USFDA-Class 1 medical devices now includes three new systems. The TSQ Altis and Quantis MD mass spectrometers and the Vanquish MD HPLC. These