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What to Expect From Thermo Fisher (TMO) in Q3 Earnings
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Medical instruments manufacturer, Thermo Fisher Scientific, Inc. (TMO - Free Report) is slated to release third-quarter 2017 results on Oct 25, before the market opens.
Last quarter, the company posted earnings of $2.30 per share, surpassing the Zacks Consensus Estimate by 1.3%. In fact, Thermo Fisher’s earnings outpaced the Zacks Consensus Estimate in all the past four quarters with an average beat of 2.3%. Let’s see how things are shaping up prior to this announcement.
Key Catalyst
The acquisition of FEI has already started generating synergies and largely contributing to this Waltham MA-based company’s analytical instruments portfolio from the last two quarters. The acquisition has enabled Thermo Fisher to access FEI’s industry leading high-performance electron microscopy platform used for protein study and facilitating life-science research. This is also a vital highlight of the quarter to be reported.
Thermo Fisher Scientific Inc Price and EPS Surprise
Thermo Fisher anticipates realizing total synergies of approximately $80 million by the end of three years following the deal’s closure with about $55 million of cost synergies and roughly $25 million of adjusted operating income benefits from revenue-related synergies. This should get reflected in third-quarter 2017 performance.
Overall, the company is gearing up for yet another quarter of strong analytical instruments segmental growth. In the third quarter, Thermo Fisher expects to see a positive impact from the electron microscopy business as well as strong volume leverage and productivity.
The Zacks Consensus Estimate for Analytical Instruments operating income is pegged at $233 million, in line with the sequentially last quarter’s reported number. Total revenue estimate for this segment also remains at an impressive level of $1.11 billion.
Here are other factors that might influence Thermo Fisher’s third-quarter results:
The company’s focus to boost growth through implementation of strategies and strengthening of its product offerings is encouraging. These initiatives are likely to help it post solid results in the third quarter.
The company had spent $750 million on research and development in 2016 and the same trend is continuing through the last couple of quarters in 2017. A major development in this field is that Novartis’ chimeric antigen receptor T cell (CAR-T) therapy Kymriah, the first FDA-approved cell therapy for Leukemia, utilizes Thermo Fisher’s CTS Dynabeads Technology.
We expect all innovations and product launches to significantly contribute to the company’s top line in the third quarter itself.
The company’s aim to expand capabilities in the fast-growing Asia-Pacific zone as well as the emerging markets should also lead to impressive results. Standout contributors in recent times are China, India and South Korea. With strategic investments to support key customer applications, Thermo Fisher hopes to maintain this bullish momentum for the rest of 2017.
Growth is also likely to be seen in applied markets such as, environmental and food safeties apart from life science. In addition, the company is currently betting on some key areas under focus with enormous opportunities. These are advancing precision medicines from mass spectrometry to the targeted gene sequencing and structural biology.
However, we are apprehensive about Thermo Fisher citing a foreign exchange headwind on 2017 revenues and adjusted EPS. Also, an unfavorable macroeconomic condition continues to weigh heavily on the stock. Plus, stiff competition continues to impose challenges on the stock’s value.
Zacks ESP: Thermo Fisher has an Earnings ESP of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Thermo Fisher carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP.
Other Stocks to Consider
Here are a few medical stocks worth considering as our model indicates them to consist of the right combination of elements to to post an earnings beat this quarter.
Abbott (ABT - Free Report) has an Earnings ESP of +0.17% and a Zacks Rank of 2.
Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +2.06% with a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and aslo carries a Zacks Rank of 3.
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Image: Bigstock
What to Expect From Thermo Fisher (TMO) in Q3 Earnings
Medical instruments manufacturer, Thermo Fisher Scientific, Inc. (TMO - Free Report) is slated to release third-quarter 2017 results on Oct 25, before the market opens.
Last quarter, the company posted earnings of $2.30 per share, surpassing the Zacks Consensus Estimate by 1.3%. In fact, Thermo Fisher’s earnings outpaced the Zacks Consensus Estimate in all the past four quarters with an average beat of 2.3%. Let’s see how things are shaping up prior to this announcement.
Key Catalyst
The acquisition of FEI has already started generating synergies and largely contributing to this Waltham MA-based company’s analytical instruments portfolio from the last two quarters. The acquisition has enabled Thermo Fisher to access FEI’s industry leading high-performance electron microscopy platform used for protein study and facilitating life-science research. This is also a vital highlight of the quarter to be reported.
Thermo Fisher Scientific Inc Price and EPS Surprise
Thermo Fisher Scientific Inc Price and EPS Surprise | Thermo Fisher Scientific Inc Quote
Thermo Fisher anticipates realizing total synergies of approximately $80 million by the end of three years following the deal’s closure with about $55 million of cost synergies and roughly $25 million of adjusted operating income benefits from revenue-related synergies. This should get reflected in third-quarter 2017 performance.
Overall, the company is gearing up for yet another quarter of strong analytical instruments segmental growth. In the third quarter, Thermo Fisher expects to see a positive impact from the electron microscopy business as well as strong volume leverage and productivity.
The Zacks Consensus Estimate for Analytical Instruments operating income is pegged at $233 million, in line with the sequentially last quarter’s reported number. Total revenue estimate for this segment also remains at an impressive level of $1.11 billion.
Here are other factors that might influence Thermo Fisher’s third-quarter results:
The company’s focus to boost growth through implementation of strategies and strengthening of its product offerings is encouraging. These initiatives are likely to help it post solid results in the third quarter.
The company had spent $750 million on research and development in 2016 and the same trend is continuing through the last couple of quarters in 2017. A major development in this field is that Novartis’ chimeric antigen receptor T cell (CAR-T) therapy Kymriah, the first FDA-approved cell therapy for Leukemia, utilizes Thermo Fisher’s CTS Dynabeads Technology.
We expect all innovations and product launches to significantly contribute to the company’s top line in the third quarter itself.
The company’s aim to expand capabilities in the fast-growing Asia-Pacific zone as well as the emerging markets should also lead to impressive results. Standout contributors in recent times are China, India and South Korea. With strategic investments to support key customer applications, Thermo Fisher hopes to maintain this bullish momentum for the rest of 2017.
Growth is also likely to be seen in applied markets such as, environmental and food safeties apart from life science. In addition, the company is currently betting on some key areas under focus with enormous opportunities. These are advancing precision medicines from mass spectrometry to the targeted gene sequencing and structural biology.
However, we are apprehensive about Thermo Fisher citing a foreign exchange headwind on 2017 revenues and adjusted EPS. Also, an unfavorable macroeconomic condition continues to weigh heavily on the stock. Plus, stiff competition continues to impose challenges on the stock’s value.
Here’s what our quantitative model predicts:
Thermo Fisher has the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks ESP: Thermo Fisher has an Earnings ESP of +0.37%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Thermo Fisher carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP.
Other Stocks to Consider
Here are a few medical stocks worth considering as our model indicates them to consist of the right combination of elements to to post an earnings beat this quarter.
Abbott (ABT - Free Report) has an Earnings ESP of +0.17% and a Zacks Rank of 2.
Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +2.06% with a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and aslo carries a Zacks Rank of 3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>