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What's in Store for Thermo Fisher (TMO) in Q3 Earnings?
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Thermo Fisher Scientific Inc. (TMO - Free Report) is slated to release third-quarter 2023 results on Oct 25, 2023, before market open.
Thermo Fisher’s earnings of $5.15 per share in the last reported quarter missed the Zacks Consensus Estimate by 5.2%. Its earnings surpassed estimates in three of the trailing four quarters, the average surprise being 1.70%.
Let's discuss the factors that are likely to be reflected in the upcoming results.
Factors at Play
Like the last quarter, Thermo Fisher’s Analytical Instruments segment is expected to have generated strong sales in the third quarter, banking on chromatography and mass spectrometry and the electron microscopy businesses. Per our model, Thermo Fisher’s Analytical Instruments’ business projected revenues are pegged at $1.89 billion for the third quarter, suggesting a 16.4% growth year over year.
In August 2023, TMO commercially launched the EXENT Solution after receiving IVDR certification. The EXENT solution is a fully integrated and automated mass spectrometry system designed to transform diagnosis and assessment for patients with monoclonal gammopathies, including multiple myeloma. This is likely to have contributed to the second-quarter top line backed by strong customer adoption.
Within the Life-Science Solutions segment, the company is expected to have registered a decline due to moderation in pandemic-related revenues in the segment. Further, unfavorable macroeconomic conditions and foreign currency fluctuations might have impeded growth in the third quarter.
Per our model, the Life-Science Solutions’ business is expected to generate $2.25 billion in revenues for the third quarter, calling for a 23.9% decline year over year.
The Specialty Diagnostics segment (Clinical Diagnostics business from the molecular controls that go into testing kits) is expected to have registered positive contributions in the form of continued growth in the microbiology and transplant diagnostics businesses. Our model projects Specialty Diagnostics’ business to report $873.3 million in revenues for the quarter to be reported, suggesting an 18% growth year over year.
Within specialty diagnostics, Thermo Fisher recently launched the first and only immunoassay to help doctors stratify a mother's risk of developing pre-eclampsia, a severe complication that can develop in pregnancy and the post-partum period, endangering both mother and baby. The company received Breakthrough designation and FDA clearance for assessing a patient's risk of developing severe pre-eclampsia, enabling doctors to manage care better. This is likely to have contributed to the company’s revenues in the quarter to be reported.
Furthermore, in August 2023, Thermo Fisher’s launch of a new chromosomal microarray designed to improve cytogenetic research lab productivity, efficiency and profitability with an industry-leading two-day turnaround time is expected to have registered strong market adoption, thus contributing to the company’s to-be-reported quarter’s revenues.
Thermo Fisher Scientific Inc. Price and EPS Surprise
However, Thermo Fisher is experiencing a continuous decline in COVID testing-related demand and is expected to continue at much lower levels in 2023 as customer testing and therapy and vaccine demand decline. This is likely to have impeded TMO’s revenues in the third quarter.
Within the Laboratory Products and Services segment, the company is expected to have gained from strong productivity and volume leverage within the pharma services business and the research and safety market channel. The company has made major investments in the pharma services business of late. The addition of an early development hub at the site in Bourgoin, France, enabling early development in addition to commercial manufacturing, is likely to have contributed to the company’s top line.
In August 2023, Thermo Fisher acquired CorEvitas for $912.5 million in cash. The buyout advances world-class clinical research capabilities with a leading regulatory-grade registry platform. CorEvitas will join the Laboratory Products and Biopharma Services division of Thermo Fisher. We believe this buyout to have a strong contribution to the company’s top line in the third quarter.
Our model projects Laboratory Products and Services business to report $6.07 billion in revenues in the third quarter, an 8.7% growth year over year.
Q3 Estimates
The Zacks Consensus Estimate for third-quarter total revenues is pegged at $10.63 billion, suggesting a 0.4% fall from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at $5.66 per share, indicating an 11.4% rise from the year-ago quarter’s reported figure.
What Our Quantitative Model Predicts
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Thermo Fisher has an Earnings ESP of -0.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
The company has long-term earnings growth rate of 35.7%. PODD’s earnings beat estimates in the last reported quarter. It has a four-quarter average earnings surprise of 126.94%.
Canopy Growth (CGC - Free Report) has an Earnings ESP of +53.85% and a Zacks Rank of 2.
The company has long-term earnings growth rate of 56.8%. CGC’s earnings beat estimates in the last reported quarter by 60%.
Axonics Modulation Technologies (AXNX - Free Report) has an Earnings ESP of +227.3% and a Zacks Rank of 2.
The stock has a four-quarter average earnings surprise of 37.78%. AXNX has lost 8.9% in th past six months compared with the industry’s decline of 26.7%.
Image: Bigstock
What's in Store for Thermo Fisher (TMO) in Q3 Earnings?
Thermo Fisher Scientific Inc. (TMO - Free Report) is slated to release third-quarter 2023 results on Oct 25, 2023, before market open.
Thermo Fisher’s earnings of $5.15 per share in the last reported quarter missed the Zacks Consensus Estimate by 5.2%. Its earnings surpassed estimates in three of the trailing four quarters, the average surprise being 1.70%.
Let's discuss the factors that are likely to be reflected in the upcoming results.
Factors at Play
Like the last quarter, Thermo Fisher’s Analytical Instruments segment is expected to have generated strong sales in the third quarter, banking on chromatography and mass spectrometry and the electron microscopy businesses. Per our model, Thermo Fisher’s Analytical Instruments’ business projected revenues are pegged at $1.89 billion for the third quarter, suggesting a 16.4% growth year over year.
In August 2023, TMO commercially launched the EXENT Solution after receiving IVDR certification. The EXENT solution is a fully integrated and automated mass spectrometry system designed to transform diagnosis and assessment for patients with monoclonal gammopathies, including multiple myeloma. This is likely to have contributed to the second-quarter top line backed by strong customer adoption.
Within the Life-Science Solutions segment, the company is expected to have registered a decline due to moderation in pandemic-related revenues in the segment. Further, unfavorable macroeconomic conditions and foreign currency fluctuations might have impeded growth in the third quarter.
Per our model, the Life-Science Solutions’ business is expected to generate $2.25 billion in revenues for the third quarter, calling for a 23.9% decline year over year.
The Specialty Diagnostics segment (Clinical Diagnostics business from the molecular controls that go into testing kits) is expected to have registered positive contributions in the form of continued growth in the microbiology and transplant diagnostics businesses. Our model projects Specialty Diagnostics’ business to report $873.3 million in revenues for the quarter to be reported, suggesting an 18% growth year over year.
Within specialty diagnostics, Thermo Fisher recently launched the first and only immunoassay to help doctors stratify a mother's risk of developing pre-eclampsia, a severe complication that can develop in pregnancy and the post-partum period, endangering both mother and baby. The company received Breakthrough designation and FDA clearance for assessing a patient's risk of developing severe pre-eclampsia, enabling doctors to manage care better. This is likely to have contributed to the company’s revenues in the quarter to be reported.
Furthermore, in August 2023, Thermo Fisher’s launch of a new chromosomal microarray designed to improve cytogenetic research lab productivity, efficiency and profitability with an industry-leading two-day turnaround time is expected to have registered strong market adoption, thus contributing to the company’s to-be-reported quarter’s revenues.
Thermo Fisher Scientific Inc. Price and EPS Surprise
Thermo Fisher Scientific Inc. price-eps-surprise | Thermo Fisher Scientific Inc. Quote
However, Thermo Fisher is experiencing a continuous decline in COVID testing-related demand and is expected to continue at much lower levels in 2023 as customer testing and therapy and vaccine demand decline. This is likely to have impeded TMO’s revenues in the third quarter.
Within the Laboratory Products and Services segment, the company is expected to have gained from strong productivity and volume leverage within the pharma services business and the research and safety market channel. The company has made major investments in the pharma services business of late. The addition of an early development hub at the site in Bourgoin, France, enabling early development in addition to commercial manufacturing, is likely to have contributed to the company’s top line.
In August 2023, Thermo Fisher acquired CorEvitas for $912.5 million in cash. The buyout advances world-class clinical research capabilities with a leading regulatory-grade registry platform. CorEvitas will join the Laboratory Products and Biopharma Services division of Thermo Fisher. We believe this buyout to have a strong contribution to the company’s top line in the third quarter.
Our model projects Laboratory Products and Services business to report $6.07 billion in revenues in the third quarter, an 8.7% growth year over year.
Q3 Estimates
The Zacks Consensus Estimate for third-quarter total revenues is pegged at $10.63 billion, suggesting a 0.4% fall from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at $5.66 per share, indicating an 11.4% rise from the year-ago quarter’s reported figure.
What Our Quantitative Model Predicts
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Thermo Fisher has an Earnings ESP of -0.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
Insulet (PODD - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has long-term earnings growth rate of 35.7%. PODD’s earnings beat estimates in the last reported quarter. It has a four-quarter average earnings surprise of 126.94%.
Canopy Growth (CGC - Free Report) has an Earnings ESP of +53.85% and a Zacks Rank of 2.
The company has long-term earnings growth rate of 56.8%. CGC’s earnings beat estimates in the last reported quarter by 60%.
Axonics Modulation Technologies (AXNX - Free Report) has an Earnings ESP of +227.3% and a Zacks Rank of 2.
The stock has a four-quarter average earnings surprise of 37.78%. AXNX has lost 8.9% in th past six months compared with the industry’s decline of 26.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.