) had an identity crisis. A public company for 20 years, the Waltham (Mass.) outfit had been such a confusing mix of 23 subsidiaries that Wall Street threw up its hands. But no more. Under CEO Richard Syron, the former head of the American Stock Exchange who joined in June, 1999, Thermo has launched a plan to transform itself into one entity. The Street is beginning to take notice. Since January, 2000, it has shed peripheral businesses such as artificial wood and kitty litter, keeping high-growth optics and life-sciences units. The efforts, which also involved at least five "spin-ins," have netted nearly $1.5 billion, money to spend for medical instrument companies, says Michael Hutchison of Barrington Research. "That could push up the numbers quite a bit."
Thermo stock has already performed well this year, despite the jittery market. While the company warned on Feb. 22 that first-quarter cash operating earnings (excluding goodwill amortization) would be 19 cents per share--14% below Wall Street estimates--it assured investors that full-year results would bring $1.00, or 25% more than 2000. Even though, at 28, the p-e ratio is high, analyst Paul Knight of Thomas Weisel rates Thermo a strong buy and sees it reaching 40 in 6 to 12 months. The company has a solid balance sheet: $13 a share in book value and $5.5 a share in cash. And its p-e is lower than most of is rivals in high-growth life sciences.Gene Marcial is on vacation. By Mara Der Hovanesian