Thermo’s earnings fall sharply

Thermo Fisher’s fourth corner and annual earnings dropped sharply because of costs resulting from the merger of Massachusetts-based Thermo Electron and New Hampshire-based Fisher Scientific, even as the size of the company – both in terms of revenue and assets — vastly expanded.

The company reported a net income of $25 million, half of the company’s profit in the same quarter of 2005. When the amount of shares of the new entity is taken into account, diluted earnings per share was 8 cents, 25 percent of the earnings in the same quarter of 2005.

Without the merger costs, however, the company said adjusted net income would be $181.6 million compared to $77 million and the adjusted earnings per share would be 57 cents per share, a 21 percent increase.

For the year, the company’s net income was $169 million, a $54 million decline, while its adjusted income was $387 million or a $146 million increase.

Among the costs involved in the merger was some $36 million in accelerated stock options, some $74 million for the sale of inventories, $32 million in restructuring costs (severance pay and abandoned facilities) and $93 million for amortization of acquisition assets.

At the end of the year, Thermo Fisher had some $21 billion in assets, compared to $4.2 billion before the merger. Much of that growth is speculative however: some $6.5 billion in “goodwill” and some $7 billion growth in “acquisition-related intangible assets.”

The company still expects to achieve its goals of $75 million in cost savings this year. It also said it expected revenues to grow to more than $9.4 billion in 2007, an increase of 6 to 8 percent more than the company’s adjusted 2006 revenues – BOB SANDERS

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