Morningstar | Thermo Fisher Finishes Year on Strong Note
Thermo Fisher Scientific reported in-line fourth-quarter results with 8% organic revenue growth. Its 2019 guidance for 2%-4% growth (with 200 basis points of negative foreign-exchange contribution) is largely in line with our forecast, so we are maintaining our fair value estimate. Our narrow moat rating is intact as well. The shares look slightly expensive at current levels.End markets still show favorable conditions across the board, but the pharma/biotech channel remains particularly healthy, finishing the year with low teens growth. For the full year, this channel delivered midteens growth as the company is gaining market share in the instrumentation as well as the services businesses. Academic and government grew in the midsingle digits, with healthy performance for life science and analytical instruments units. The industrial and applied segment was up 10%, and diagnostics grew in the midsingle digits. All geographies delivered healthy growth, but China continued to produce remarkable results, with another 20%-plus growth quarter.
Operating margin expansion was mixed across the segments, with unfavorable business mix and strategic investments more than offset by volume pull and productivity. As a result, the operating margin was up 90 basis points from the fourth quarter of last year.
Thermo Fisher Scientific is engaged in serving science. The company's segments include: Life Sciences Solutions, which provides reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease; Analytical Instruments, which provides instruments, consumables, software and services that are used for a range of applications in the laboratory, on the production line and in the field; and Specialty Diagnostics, which provides diagnostic test kits, reagents, culture media, instruments and associated products for customers in healthcare, clinical, pharmaceutical, industrial, and food safety laboratories.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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