Laboratory equipment maker Thermo Fisher Scientific Inc, which this month agreed to acquire Life Technologies Inc for more than $13 billion, on Wednesday reported a higher-than-expected first-quarter profit, helped by a 10 percent rise in specialty diagnostics sales.
Excluding one-time items, Thermo Fisher posted earnings of $1.37 per share, topping analysts average expectations by 8 cents, according to Thomson Reuters I/B/E/S.
Thermo Fisher shares were up 1 percent.
The company raised the low end of its full-year revenue view and lowered its 2013 earnings-per-share forecast to reflect its decision to suspend share buybacks as it prepares to pay for Life Tech. The $13.6 billion Life Tech acquisition, which will give Thermo Fisher a major presence in advanced genetic testing, is expected to close in early 2014.
Thermo Fisher now expects adjusted earnings of $5.27 to $5.39 per share, down from its prior view of $5.32 to $5.46 per share. It expects 2013 revenue of $12.84 billion to $13 billion. The low end of the previously announced range was $12.80 billion. Analysts are looking for earnings of $5.40 per share and revenue of $12.96 billion.
"The business is holding up very well considering the pressure on the industrial and academic (markets)," said Mizuho Securities analyst Peter Lawson. "On the flip side, the pharma business is doing exceptionally well."
The automatic U.S. budget cuts known as sequestration is expected to hurt academic and government research customers.
Thermo, on a conference call with analysts, said sequestration was likely to have a bigger impact over the rest of the year than it did in the first quarter.
The world's largest maker of laboratory equipment and scientific instruments reported a net profit from continuing operations of $340.8 million, or 94 cents per share, compared with a profit of $280.8 million, or 76 cents per share, a year earlier.
Revenue for the quarter rose 4 percent to $3.19 billion, roughly in line with Wall Street estimates of $3.17 billion.
Specialty Diagnostics saw sales rise 10 percent to $806 million, while sales from the Laboratory Products and Services unit rose 5 percent to $1.54 billion.
Sales from the Analytical Technologies unit fell to $978 million from $980 million a year ago, possibly reflecting an impact of sequestration.
Thermo said it was having a bigger impact on capital spending than on consumables and reagents used in biotech and pharmaceutical development.
Thermo Fisher's shares were up 79 cents at $81.43 in late morning trading on the New York Stock Exchange.
(Additional reporting by Ransdell Pierson; Editing by Sriraj Kalluvila and Maureen Bavdek)