We are experiencing some temporary issues. The market data on this page is currently delayed. Please bear with us as we address this and restore your personalized lists.
Thermo Fisher Q3 Earnings Top Estimates, Revenues Miss, Stock Dips
Thermo Fisher Scientific Inc.'s TMO third-quarter 2024 adjusted earnings per share (EPS) of $5.28 beat the Zacks Consensus Estimate by 0.6%. However, the figure decreased 7.2% year over year.
The adjusted number excludes certain expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.25, down 3.8% on a year-over-year basis.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Following the earnings announcement, shares of TMO decreased nearly 2% in the pre-market trading today.
TMO’s Q3 Revenues in Detail
Revenues in the quarter increased a modest 0.2% year over year to $10.60 billion. However, the top line missed the Zacks Consensus Estimate by 0.4%.
Both organic and core organic revenues in the reported quarter were flat year over year.
Thermo Fisher’s Segmental Analysis
Thermo Fisher operates under four business segments, as discussed below:
Life Sciences Solutions
Revenues in the Life Sciences Solutions segment (22.5% of total revenues) declined 1.9% year over year to $2.39 billion. This missed our model’s projection of $2.48 billion for this segment.
Analytical Instruments
Revenues in this segment (17.1%) rose 3.1% to $1.81 billion. Our model’s projection was $1.98 billion.
Thermo Fisher Scientific Inc. Price, Consensus and EPS Surprise
Thermo Fisher Scientific Inc. Price, Consensus and EPS Surprise
Thermo Fisher Scientific Inc. price-consensus-eps-surprise-chart | Thermo Fisher Scientific Inc. Quote
Specialty Diagnostics
Revenues in the Specialty Diagnostics segment (10.7%) increased 4.2% year over year to $1.13 billion. This surpassed our model’s projected $1.05 billion revenues for this segment.
Laboratory Products and Biopharma Services
Revenues in this segment (54.2%) rose 0.2% to $5.74 billion. Our model’s projection was $5.59 billion.
TMO’s Margin Performance
The gross margin of 41.7% in the third quarter contracted 20 basis points (bps) year over year on a 0.6% increase in the cost of revenues.
In the quarter, selling, general and administrative expenses rose 10.2% to $1.74 billion. Research and development expenses increased 8.5% to $346 million.
The adjusted operating margin in the quarter was 22%, reflecting a contraction of 193 bps.
TMO’s Financial Position
The company ended the third quarter of 2024 with cash and cash equivalents and short-term investments of $6.65 billion compared with $8.82 billion at the end of the second quarter of 2024.
Cumulative net cash from operating activities at the end of the third quarter was $5.38 billion compared with $4.68 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth being 15.89%.
Thermo Fisher’s Revised 2024 Guidance
The company raised its 2024 adjusted EPS guidance to a new range of $21.35-$22.07 (earlier $21.29 to $22.07). The Zacks Consensus Estimate for the company’s full-year EPS stands at $21.72.
However, the company continues to expect 2024 revenues in the range of $42.4-$43.3 billion. The Zacks Consensus Estimate for the metric is pegged at $42.85 billion.
Our Take on Thermo Fisher
Thermo Fisher exited the third quarter of 2024 with an earnings beat, while revenues were a miss. Meanwhile, the bottom line also declined compared to last year’s figure. A contraction of both margins in the quarter is discouraging as well.
On a positive note, TMO advanced its proven growth strategy, launching a range of high-impact, innovative new products during the quarter. Thermo Fisher also continued to deepen its trusted partner status, such as partnering with the National Cancer Institute on the myeloMATCH precision medicine umbrella trial, expanding the Cincinnati, OH, and Bend, OR, sites in its pharma services business and building a new bioanalytical lab in Gothenburg, Sweden, under its clinical research business. All these are translating into meaningful commercial wins for the company, which is encouraging.
TMO’s Zacks Rank and Key Picks
Thermo Fisher currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Quest Diagnostics DGX, Intuitive Surgical ISRG and HealthEquity HQY.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Intuitive Surgical, carrying a Zacks Rank #2, posted a third-quarter 2024 EPS of $1.84, topping the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.
ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.9%.
HealthEquity, carrying a Zacks Rank #2, reported second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.
HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
