Life Technologies reported earnings on Tuesday after market hours and
beat analysts’ expectations with earnings per share coming in at $0.72,
up from $0.50 last Q1. Revenues increased 5% year over year to $939
million. Operating margin came in at 30.2% in the first quarter,
approximately 2% higher than the same period of the prior year. This was
primarily due to the company’s continued focus on operational
efficiencies. They recently realigned their segments into three
categories, providing historical data going back to 2010, to better
reflect their business model: Research Consumables, Genetic Analysis,
and Applied Sciences. Revenues increased 4%, 7%, and 4%, respectively
within these segments. Genetic Analysis sales were driven by robust
growth of Ion Torrent and CE products, partially offset by lower sales
of SOLiD products. The change in reported earnings has no effect on
results of operations, financial condition, or cash flows. Regional
revenue growth rates year over year were as follows: the Americas were
flat, Europe grew 2%, Asia Pacific grew 8%, and Japan grew 7%. On a
negative note, their ending cash and short-term investments was down to
$267 million, from $887 million in 2011, due to one-time cash payments.
The company repurchased $185 million worth in shares in the first
quarter with plans to purchase another $200 million in the upcoming
quarters. Their return on investment capital was 9%, while they plan to
reach their goal of 10% ROIC by the end of 2012. Total debt was about
$2.4 billion. In the first quarter LIFE made 2 tuck-in acquisitions with
no expected material impact on earnings: Matix Microsciences and LSI.
Both acquisitions will better their position in the animal health and
food safety businesses. They also experienced about a 6% increase in
online sales and activated more distribution centers across the world.
During the quarter they continued to deliver on their innovation
pipeline, launching Ion AmpliSeq Custom Panels and TaqMan Mutation
Detection Assays. Looking ahead, they are still on track to release
their most innovative product yet, Ion Proton, on schedule in mid and
late 2012. They expect next quarter’s revenue to be flat with a tax rate
of 28.6%, similar to Q1’s tax rate. Life Technologies reiterated its
outlook for 2012, still expecting organic revenue growth of 2-4%,
resulting in adjusted EPS of $3.90-$4.05.
-Jorge Perez
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