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Thermo Fisher (TMO) Q3 Earnings Top Estimates, Margins Up
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Thermo Fisher Scientific Inc.'s (TMO - Free Report) third-quarter 2023 adjusted earnings per share (EPS) of $5.69 topped the Zacks Consensus Estimate by 1.9%. The figure also rose 12% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.42, up 16.6% on a year-over-year basis.
Revenues in Detail
Revenues in the quarter totaled $10.57 billion, down 0.9% year over year. The top line surpassed the Zacks Consensus Estimate by a marginal 0.04%.
Segment Details
Organic revenues in the reported quarter were 3% lower, while Core organic revenue growth was 1%.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Biopharma Services.
Revenues in the Life Sciences Solutions segment (23% of total revenues) declined 17.9% year over year to $2.43 billion, while Analytical Instruments Segment sales (16.6%) increased 8.2% to $1.75 billion. This figure compares with our model’s projection of $2.25 billion for the Life Sciences Solutions segment and $1.89 billion for the Analytical Instruments Segment for the third quarter.
Revenues in the Laboratory Products and Biopharma Services segment (54.2%) rose 2.6% to $5.73 billion. This figure compares with our model’s projection of $6.07 billion for the third quarter. The Specialty Diagnostics segment (10.2%) recorded a 2.3% year-over-year rise in revenues to $1.08 billion. This figure compares with our model’s projection of $873 million for the third quarter.
Margin Analysis
The gross margin of 41.9% in the third quarter expanded 39 basis points (bps) year over year despite a 1.6% rise in the cost of revenues.
In the quarter, selling, general and administrative expenses fell 9.5% to $1.58 billion. Research and development expenses declined 9.1% to $319 million.
Thermo Fisher Scientific Inc. Price, Consensus and EPS Surprise
The adjusted operating margin in the quarter came in at 23.9%, reflecting an expansion of 206 bps.
Financial Position
The company exited third-quarter 2023 with cash and cash equivalents of $6.15 billion compared with $8.52 billion at the end of second-quarter 2023.
Cumulative net cash from operating activities was $4.68 billion compared with $5.67 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth being 16.41%.
Guidance
Thermo Fisher updated its full-year 2023 guidance.
The company now expects 2023 revenues to be $42.7 billion, with Core organic revenue growth of 1%. The Zacks Consensus Estimate for the same is pegged at $43.43 billion.
The adjusted EPS is projected to be $21.50. The Zacks Consensus Estimate for the metric is pegged at $22.22 billion.
Our Take
Thermo Fisher exited the third quarter of 2023 with better-than-expected results. The company’s PPI Business System and strong execution by its global team enabled the company to deliver strong financial performance for the quarter. Thermo Fisher advanced its proven growth strategy by launching a range of high-impact, innovative new products, including the groundbreaking EXENT Solution in Europe.
However, the challenging macroeconomic environment and a slowdown in economic activity in China and worldwide hampered revenues. The year-over-year decline in revenues in Life Science Solutions is disappointing.
Zacks Rank and Key Picks
Thermo Fisher currently carries a Zacks Rank #4 (Sell).
Some of the top-ranked stocks from the broader medical space that are supposed to report earnings soon are Addus HomeCare (ADUS - Free Report) , Insulet (PODD - Free Report) and Inari Medical (NARI - Free Report) .
Addus currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its third-quarter 2023 adjusted EPS is pegged at $1.05. The same for its revenues stands at $266.2 million.
The Zacks Consensus Estimate for Insulet’s third-quarter 2023 adjusted EPS is currently pegged at 40 cents. The consensus estimate for revenues is pegged at $413.8 million. Insulet currently carries a Zacks Rank #2 (Buy).
Insulet has an estimated long-term growth rate of 41.5%. PODD’s earnings yield of 1.14% compares favorably with the industry’s -2.62%.
Inari Medical currently has a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2023 adjusted EPS is currently pegged at a breakeven level. The same for revenues is pegged at $122.4 million.
NARI has an estimated growth rate of 107.3% for 2023. NARI’s earnings yield of 0.07% compares favorably with the industry’s yield of -8.47%.
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Thermo Fisher (TMO) Q3 Earnings Top Estimates, Margins Up
Thermo Fisher Scientific Inc.'s (TMO - Free Report) third-quarter 2023 adjusted earnings per share (EPS) of $5.69 topped the Zacks Consensus Estimate by 1.9%. The figure also rose 12% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.42, up 16.6% on a year-over-year basis.
Revenues in Detail
Revenues in the quarter totaled $10.57 billion, down 0.9% year over year. The top line surpassed the Zacks Consensus Estimate by a marginal 0.04%.
Segment Details
Organic revenues in the reported quarter were 3% lower, while Core organic revenue growth was 1%.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Biopharma Services.
Revenues in the Life Sciences Solutions segment (23% of total revenues) declined 17.9% year over year to $2.43 billion, while Analytical Instruments Segment sales (16.6%) increased 8.2% to $1.75 billion. This figure compares with our model’s projection of $2.25 billion for the Life Sciences Solutions segment and $1.89 billion for the Analytical Instruments Segment for the third quarter.
Revenues in the Laboratory Products and Biopharma Services segment (54.2%) rose 2.6% to $5.73 billion. This figure compares with our model’s projection of $6.07 billion for the third quarter. The Specialty Diagnostics segment (10.2%) recorded a 2.3% year-over-year rise in revenues to $1.08 billion. This figure compares with our model’s projection of $873 million for the third quarter.
Margin Analysis
The gross margin of 41.9% in the third quarter expanded 39 basis points (bps) year over year despite a 1.6% rise in the cost of revenues.
In the quarter, selling, general and administrative expenses fell 9.5% to $1.58 billion. Research and development expenses declined 9.1% to $319 million.
Thermo Fisher Scientific Inc. Price, Consensus and EPS Surprise
Thermo Fisher Scientific Inc. price-consensus-eps-surprise-chart | Thermo Fisher Scientific Inc. Quote
The adjusted operating margin in the quarter came in at 23.9%, reflecting an expansion of 206 bps.
Financial Position
The company exited third-quarter 2023 with cash and cash equivalents of $6.15 billion compared with $8.52 billion at the end of second-quarter 2023.
Cumulative net cash from operating activities was $4.68 billion compared with $5.67 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth being 16.41%.
Guidance
Thermo Fisher updated its full-year 2023 guidance.
The company now expects 2023 revenues to be $42.7 billion, with Core organic revenue growth of 1%. The Zacks Consensus Estimate for the same is pegged at $43.43 billion.
The adjusted EPS is projected to be $21.50. The Zacks Consensus Estimate for the metric is pegged at $22.22 billion.
Our Take
Thermo Fisher exited the third quarter of 2023 with better-than-expected results. The company’s PPI Business System and strong execution by its global team enabled the company to deliver strong financial performance for the quarter. Thermo Fisher advanced its proven growth strategy by launching a range of high-impact, innovative new products, including the groundbreaking EXENT Solution in Europe.
However, the challenging macroeconomic environment and a slowdown in economic activity in China and worldwide hampered revenues. The year-over-year decline in revenues in Life Science Solutions is disappointing.
Zacks Rank and Key Picks
Thermo Fisher currently carries a Zacks Rank #4 (Sell).
Some of the top-ranked stocks from the broader medical space that are supposed to report earnings soon are Addus HomeCare (ADUS - Free Report) , Insulet (PODD - Free Report) and Inari Medical (NARI - Free Report) .
Addus currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its third-quarter 2023 adjusted EPS is pegged at $1.05. The same for its revenues stands at $266.2 million.
Addus has a long-term historical growth rate of 12.6%. ADUS’ earnings yield of 5.24% compares favorably with the industry’s yield of 4.37%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Insulet’s third-quarter 2023 adjusted EPS is currently pegged at 40 cents. The consensus estimate for revenues is pegged at $413.8 million. Insulet currently carries a Zacks Rank #2 (Buy).
Insulet has an estimated long-term growth rate of 41.5%. PODD’s earnings yield of 1.14% compares favorably with the industry’s -2.62%.
Inari Medical currently has a Zacks Rank #2. The Zacks Consensus Estimate for its third-quarter 2023 adjusted EPS is currently pegged at a breakeven level. The same for revenues is pegged at $122.4 million.
NARI has an estimated growth rate of 107.3% for 2023. NARI’s earnings yield of 0.07% compares favorably with the industry’s yield of -8.47%.