Have you looked into how Thermo Fisher Scientific (TMO Quick QuoteTMO - Free Report) performed internationally during the quarter ending September 2024? Considering the widespread global presence of this maker of scientific instrument and laboratory supplies, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

While delving into TMO's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The recent quarter saw the company's total revenue reaching $10.6 billion, marking an improvement of 0.2% from the prior-year quarter. Next, we'll examine the breakdown of TMO's revenue from abroad to comprehend the significance of its international presence.

A Look into TMO's International Revenue Streams

During the quarter, Other regions contributed $397 million in revenue, making up 3.75% of the total revenue. When compared to the consensus estimate of $359.04 million, this meant a surprise of +10.57%. Looking back, Other regions contributed $379 million, or 3.60%, in the previous quarter, and $350 million, or 3.31%, in the same quarter of the previous year.

Of the total revenue, $1.92 billion came from Asia-Pacific during the last fiscal quarter, accounting for 18.14%. This represented a surprise of -0.83% as analysts had expected the region to contribute $1.94 billion to the total revenue. In comparison, the region contributed $1.97 billion, or 18.70%, and $1.91 billion, or 18.09%, to total revenue in the previous and year-ago quarters, respectively.

Europe accounted for 25.34% of the company's total revenue during the quarter, translating to $2.69 billion. Revenues from this region represented a surprise of -0.51%, with Wall Street analysts collectively expecting $2.7 billion. When compared to the preceding quarter and the same quarter in the previous year, Europe contributed $2.66 billion (25.26%) and $2.64 billion (25.00%) to the total revenue, respectively.

Revenue Forecasts for the International Markets

It is projected by analysts on Wall Street that Thermo Fisher will post revenues of $11.26 billion for the ongoing fiscal quarter, an increase of 3.5% from the year-ago quarter. The expected contributions from Other regions, Asia-Pacific and Europe to this revenue are 3.4%, 18.4% and 25.6%, translating into $383.29 million, $2.07 billion and $2.88 billion, respectively.

For the full year, a total revenue of $42.75 billion is expected for the company, reflecting a decline of 0.3% from the year before. The revenues from Other regions, Asia-Pacific and Europe are expected to make up 3.4%, 18.3% and 25.4% of this total, corresponding to $1.45 billion, $7.8 billion and $10.86 billion respectively.

The Bottom Line

Relying on global markets for revenues presents both prospects and challenges for Thermo Fisher. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Currently, Thermo Fisher holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Look at Thermo Fisher's Recent Stock Price Performance

Over the past month, the stock has lost 6.8% versus the Zacks S&P 500 composite's 0.4% increase. The Zacks Medical sector, of which Thermo Fisher is a part, has declined 3.5% over the same period. The company's shares have declined 6.4% over the past three months compared to the S&P 500's 5.5% increase. Over the same period, the sector has declined 4.1%.