One way to tell how happy investors are with a company's latest performance is to listen to the questions at the end of the conference call. When analysts started asking mundane questions about how an early Easter this year will affect first-quarter year-over-year comparisons, Thermo Fisher Scientific's (NYSE: TMO) management must have been smiling.

Now that Thermo Electron and Fisher Scientific have had a full year as one company, investors have a pretty good idea why the two got together. You need look no further than the difference between top-line and bottom-line growth in 2007 to see that the merger has resulted in some serious cost-cutting measures; revenue increased 10% year over year on a pro forma basis (as if the companies were one throughout 2006), while pro forma income rose a much bigger 25%.

The resulting company has become a cash-generating machine, with free cash flow coming in at just over $1.3 billion for the year. It used most of that money to repurchase shares, but it still has enough cash lying around to pick up a struggling lab supplier or two.

The big question is whether cost-cutting measures by drug companies -- Wyeth (NYSE: WYE) and Johnson & Johnson (NYSE: JNJ), just to name two -- are going to hurt Thermo Fisher and other laboratory supply companies such as Waters (NYSE: WAT) or Sigma-Aldrich (Nasdaq: SIAL). Thermo Fisher's management doesn't seem to think so. The way management sees it, drug companies are saving money by outsourcing the research to contract research organizations (CROs), so Thermo Fisher will just sell to the CROs instead.

Thermo Fisher is looking to become even more efficient this year, calling for adjusted earnings-per-share growth of 15% to 19% on just 8% to 9% growth in revenues. The laboratory supply company isn't super cheap right now, but if it can keep up double-digit growth in a recession, Christmas might come a little early for its investors.

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Fool contributor Brian Orelli, Ph.D., has spent Easter in the lab on more occasions than he cares to count. He doesn't own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool's disclosure policy works 365 days a year for you.