According to analysts, the company's near-term earnings are likely to be adversely affected following the sale of Optical Technologies. This is likely to be offset by an improvement in internal growth initiatives of the company's core businesses.
The released results for the 2003 quarter reflect Optical Technologies segment (Spectra-Physics) as a discontinued operation. Second-quarter revenues were $525 million (€434 million) compared to $467 million a year ago.
Adjusted earnings per share (EPS) increased 7 per cent for the second quarter of 2004 to $29, compared with $.27 in 2003. Adjusted operating income increased 16 per centover the 2003 quarter, and adjusted operating margin rose 40 basis points to 12.5 per cent, compared with 12.1 per cent a year ago.
Marijn Dekkers, president and chief executive officer of Thermo Electron said: "We are seeing the results of these efforts, particularly in the life science markets we serve, with continued strong sales of mass spectrometry systems and new technology platforms in our anatomical pathology and laboratory automation businesses."
"As a result of the Spectra-Physics sale to Newport Corporation, we are now focusing all of our resources on our two core segments, Life and Laboratory Sciences and Measurement and Control."
The Life and Laboratory Sciences segment reported $370 million in revenues for the second quarter of 2004, versus $314 million last year, an increase of 18 per cent. The effect of currency acquisitions increased revenues by 12 per cent. Strong sales of mass spectrometry systems, as well as anatomical pathology and laboratory automation systems, were partially offset by weaker results in Europe across the segment and lower sales of rapid test kits for diagnosing respiratory disease.
During the quarter, the acquisition of USCS was completed, bringing asset management capabilities to Thermo's laboratory services business.
Second-quarter revenues in the Measurement and Control segment increased 3per cent to $155 million, versus $151 million last year. Organic revenuesincreased 3 per cent. The net effect of acquisitions/divestitures decreased revenues by 3 per cent.
Adjusted operating income for the segment increased 4 per cent from the 2003 period, and adjusted operating margin was 9.3 per cent, up from 9.2 percent in 2003.