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Thermo Fisher Scientific (TMO - Analyst Report) is scheduled to report its fourth-quarter and full-year 2012 results before the market opens on Thursday, Jan 31, 2012. Let’s see how things are shaping up before the announcement.

Growth Factors This Past Quarter

Thermo Fisher has strong international operations and witnessed consistent growth in Asia-Pacific. As a part of Thermo Fisher’s plans to focus on Asia-Pacific, it opened a new factory in Suzhou, China, in November, thus bolstering the R&D infrastructure there. The company is also optimistic about the $2 billion addressable market in India, which holds immense opportunities in industries like pharmaceutical health care, food safety and the environment. 

We are also encouraged by the company’s progress with respect to reducing manufacturing footprint through suitable acquisitions. The most recent is the newest acquisition of One Lambda, which is likely to strengthen its foothold in the immensely potent transplant diagnostics market.

However, concern remains about lower organic growth expectations over the next two years as its exposure to China is still quite low, which does not encourage return on invested capital (ROIC).

Earnings Whispers?

Our proven model does not conclusively show that Thermo Fisher is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.  

Zacks Earnings ESP of 0.00%: The Most Accurate estimate stands at $1.28, while the Zacks Consensus Estimate is also pegged at $1.28. This comes to a difference of 0.00%.

Zacks #2 Rank (Buy): AlthoughThermo Fisher’sZacks #2 Rank (Buy) has higher chance of beating earnings, together with a 0.00% ESP, it makes surprise prediction difficult. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement. 

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right ingredients to post an earnings beat this quarter:  

NuVasive, Inc. (NUVA), Earnings ESP of +72.73% and Zacks Rank #1 (Strong Buy)

Becton, Dickinson and Company (BDX), Earnings ESP of +3.25% and Zacks Rank #2 (Buy)

Henry Schein Inc. (HSIC), Earnings ESP of +0.83% and Zacks Rank #1 (Strong Buy).

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