Biognosys' Spectronaut®, the leading vendor-agnostic software for DIA proteomics, is now directly available from Thermo Fisher Scientific under a reselling agreement End users can get access to Thermo Scientific mass spectrometry systems and Biognosys' Spectronaut software via a single offer issued by Thermo Fisher Thermo Fisher will directly quote and sell Biognosys' Spectronaut software from its product catalog ZURICH and NEWTON, Mass., Sept. 18, 2024 (GLOBE NEWSWIRE) -- Biognosys, a leading inventor and ...

Thermo Fisher Scientific (NYSE:TMO) Morgan Stanley 22nd Annual Global Healthcare Conference September 5, 2024 8:30 AM ET Company Participants Marc Casper - Chairman, President and CEO Conference Call Participants Tejas Savant - Morgan Stanley Tejas Savant Hey, everyone. Good morning. I'm Tejas Savant. I cover life sciences here at Morgan Stanley. Before we kick it off, for important disclosures, please see the Morgan Stanley Research disclosure website at morganstanley.com/researchdisclosures. And if you ha ...

Thermo Fisher Scientific Inc. (TMO) is gaining investors' confidence due to its impressive partnerships. Of late, the company has launched a slew of products to enhance its portfolio. However, declining COVID-19 testing-related demand, as well as adverse macroeconomic impacts might deter Thermo Fisher's growth. Year to date, this Zacks Rank #3 (Hold) company's shares have rallied 15.7% compared with 7.8% growth of the industry. The S&P 500 composite has risen 17.6% during the said time frame. The renowned m ...

Core Insights - Thermo Fisher Scientific (TMO) is positioned as a leading player in the healthcare diagnostics and research sector, with a robust business model that emphasizes consumables and advanced precision medicine [24][25][35] - The company reported a slight decline in total revenue of 1% but achieved core organic revenue growth slightly ahead of expectations, indicating resilience in its core business [19][30] - Despite a high valuation post-pandemic, TMO's historical performance and strategic investments suggest potential for elevated returns in the long term [24][26] Financial Performance - TMO has demonstrated impressive revenue growth of 13% annually over the past decade, with adjusted EPS and free cash flow compounding at 15% and 14% per year, respectively [25][36] - The company expects full-year revenue in the range of $42.4 billion to $43.3 billion and adjusted EPS between $21.29 and $22.07, reflecting optimism about future growth [35] - In Q2 2024, TMO reported an adjusted EPS growth rate of 4% to $5.37, showcasing its ability to maintain profitability despite market challenges [30][34] Market Position and Strategy - TMO's business model is characterized by over 80% of sales coming from consumables, primarily in developed markets, which positions it as a critical player in global healthcare [25][27] - The company is investing aggressively in R&D, spending approximately $340 million in Q2 2024, which is 7.1% of its manufacturing revenue, to remain competitive and drive innovation [33][34] - Recent acquisitions, such as the $3.1 billion deal for Olink, enhance TMO's capabilities in proteomics and support its growth strategy in advanced biopharmaceutical research [35][36] Growth Drivers - TMO's core growth is driven by strong performance in segments like Analytical Instruments and Specialty Diagnostics, with notable increases in transplant diagnostics and immunodiagnostics [20][34] - The company is expanding its operational footprint through new facilities and partnerships, particularly in the APAC region, to capitalize on emerging market opportunities [35] - Analysts expect EPS growth to accelerate from 1% in 2024 to 12% in 2026, indicating a positive outlook for TMO's financial performance [24]

Core Viewpoint - Thermo Fisher Scientific is expected to experience near-zero revenue and earnings growth in 2024, primarily due to the decline in COVID-19 testing revenue becoming immaterial. However, renewed funding for biotech startups and stimulus measures in China may help revive growth in the short term. The long-term growth thesis remains intact, driven by increasing demand in healthcare, semiconductor, and battery manufacturing sectors. The stock price is near the fair value estimate, leading to a downgrade to Hold despite the company's strong fundamentals [9][19]. Financial Performance - The organic sales growth rates for Thermo Fisher have shown a declining trend, with 1Q23 at -8% and 2Q24 at -1%. The company has experienced varying growth across its segments, with Life Sciences and Specialty Diagnostics showing improvement, while Analytical Instruments and Lab Products and Services have bottomed out [2][21]. - The 2024 guidance indicates a sales outlook of $43.4-$44.3 billion, reflecting only a 0.1% increase at the midpoint. EPS guidance has been raised to $21.29-$22.07, up just 0.5% [10]. Growth Drivers - China is emerging as a growth driver, with a government focus on "High-Quality Growth" and a year-long program to stimulate consumption and investment. This is expected to positively impact Thermo's sales in 2025, with reported sales growth in China at "mid-single digits" in 2Q 2024 [3][14]. - The pace of new clinical trial authorizations has increased significantly, with 25,572 new trials registered in 2024 through July, indicating a potential boost in demand for Thermo's products and services [15]. Acquisition and Debt Management - The acquisition of Olink for $3.1 billion has closed, expected to contribute $200 million in sales in 2024. Olink's focus on proteomics aligns with Thermo's existing product offerings, creating potential synergies [14][25]. - Thermo Fisher's debt profile remains stable, with a debt/EBITDA leverage of 3.3x gross and 2.5x net. The company ended the quarter with $8.8 billion in cash and investments, although $3.1 billion has been allocated for the Olink acquisition [12][18]. Valuation - The DCF valuation for Thermo Fisher is $577.58 per share, reflecting a slight decrease from the previous quarter. The stock is currently trading at a P/E of 26.3, which is at the high end for a company with an EPS growth rate of around 13% [7][19].

Thermo Fisher Scientific Inc.'s (TMO) second-quarter 2024 adjusted earnings per share (EPS) of $5.37 topped the Zacks Consensus Estimate by 4.9%. The figure also rose 4.3% year over year. GAAP EPS was $4.04, up 15.1% on a year-over-year basis. Segment Details Revenues in the Life Sciences Solutions segment (22.3% of total revenues) declined 4.4% year over year to $2.36 billion, while Analytical Instruments Segment sales (16.9%) rose 1.9% to $1.78 billion. Our model projected revenues of $2.26 billion for th ...

Financial Data and Key Metrics Changes - Revenue for the quarter was $10.54 billion, with adjusted operating income at $2.35 billion and an adjusted operating margin of 22.3% [17][76] - Adjusted EPS increased by 4% year-over-year to $5.37 per share, while GAAP EPS was $4.04, up 15% from the previous year [27][76] - Year-to-date free cash flow was 68% higher than the same period last year, totaling $2.6 billion after $630 million in net capital expenditures [13][51] Business Line Data and Key Metrics Changes - Life Sciences Solutions segment reported a 4% decline in revenue, with organic revenue down 3% year-over-year, despite growth in the biosciences business [30] - Specialty Diagnostics saw both reported and organic revenue increase by 1%, driven by strong growth in transplant diagnostics and immunodiagnostics [31] - Laboratory Products and Biopharma Services segment experienced a 1% decrease in both reported and organic revenue, primarily due to the runoff of vaccines and therapies revenue [79] Market Data and Key Metrics Changes - North America experienced a mid-single-digit decline, while Europe and Asia Pacific grew in the low to mid-single digits [28] - The company noted a 3% headwind to organic revenue growth due to pandemic-related revenue, primarily from vaccines and therapies [49] Company Strategy and Development Direction - The company is focused on high-impact innovation, maintaining trusted partner status with customers, and leveraging its commercial engine to drive growth [41][45] - Recent product launches include the Thermo Scientific Stellar Mass Spectrometer and new build-for-purpose editions of the Thermo Scientific Orbitrap Ascend Tribrid Mass Spectrometer [19][42] - The company is advancing its corporate social responsibility goals, including achieving zero waste certification for 30 manufacturing and warehouse sites by 2025 [12][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver differentiated performance in 2024, raising revenue guidance to a range of $42.4 billion to $43.3 billion [8][53] - The management team highlighted strong execution and customer relationships as key drivers of success, with expectations for gradual market recovery [72][95] - The company anticipates that the market will continue to improve modestly in the latter half of the year, with a focus on long-term growth [84][110] Other Important Information - The company completed the acquisition of Olink, enhancing its capabilities in next-generation proteomic solutions [46] - Adjusted SG&A expenses were 16.6% of revenue, and total R&D expenses were $340 million, reflecting ongoing investments in innovation [29] Q&A Session Summary Question: Market expectations for 2025 - Management expressed confidence in the long-term market growth of 4% to 6%, with expectations for gradual improvement in 2024 and 2025 [58][72] Question: Performance of Life Sciences Solutions segment - The biosciences business showed growth, with positive developments in bioproduction and clinical sequencing [62][86] Question: China market growth - China grew mid-single-digits, with management noting that stimulus funding is being utilized effectively [85][91] Question: Clinical research business performance - The clinical research segment outperformed, delivering positive organic revenue growth despite headwinds from vaccine-related activities [92] Question: Margin outlook for lab products - Management indicated that margins could expand as volumes recover and cost bases are adjusted [98][114]

The reported revenue represents a surprise of +0.29% over the Zacks Consensus Estimate of $10.51 billion. With the consensus EPS estimate being $5.13, the EPS surprise was +4.68%. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Revenue Growth - Organic: -1% compared to the -1.6% average estimate based on five analysts. Revenues- Labo ...

Core Insights - Thermo Fisher Scientific (TMO) reported better-than-expected second-quarter earnings and raised its full-year projections [1][5] - The company experienced a 14% year-over-year increase in net income to $1.55 billion, surpassing analysts' expectations of $1.41 billion [1][2] - Revenue slightly decreased by 1% to $10.54 billion, but still exceeded the projected $10.52 billion [2][5] Financial Guidance - Analysts project full-year revenue around $42.95 billion and adjusted EPS of $21.70, both within Thermo Fisher's updated guidance ranges [4] - The company has adjusted its full-year revenue projection to a range of $42.4 billion to $43.3 billion, raising the lower end from the previous range of $42.3 billion to $43.3 billion [8] - Adjusted EPS projections have also been increased to a range of $21.29 to $22.07 per share, compared to the previous guidance of $21.14 to $22.02 per share [8] Market Reaction - Despite the earnings beat and raised guidance, Thermo Fisher shares fell by 1.7% to $543.00 in premarket trading [5][7] - The company had previously issued warnings about a potentially lower sales outlook at the beginning of the year, making the solid Q2 results significant [6]

Revenue Performance - Second quarter revenue declined 1% to $10.54 billion in 2024, compared to $10.69 billion in 2023[5] - Revenues for the three months ended June 29, 2024, were $10,541 million, a slight decrease from $10,687 million in the same period last year[21] - Revenues for the six months ended July 1, 2023, were $21.397 billion, representing a decrease from $20.886 billion in the same period in 2024[23] - Life Sciences Solutions segment revenue decreased to $2,355 million (22.3% of total revenue) in Q2 2024 from $2,463 million (23.0% of total revenue) in Q2 2023[38] - Laboratory Products and Biopharma Services segment revenue was $5,758 million (54.6% of total revenue) in Q2 2024, down from $5,831 million (54.6% of total revenue) in Q2 2023[38] Earnings and Profitability - GAAP diluted EPS increased 15% to $4.04 in Q2 2024, compared to $3.51 in Q2 2023[16] - Adjusted EPS increased 4% to $5.37 in Q2 2024[13] - GAAP operating income grew to $1.82 billion in Q2 2024, compared to $1.58 billion in Q2 2023[16] - GAAP operating margin increased to 17.3% in Q2 2024, compared to 14.8% in Q2 2023[16] - Net income attributable to Thermo Fisher Scientific Inc. rose to $1,548 million (14.7% of revenues) from $1,361 million (12.7% of revenues)[21] - Adjusted operating income (non-GAAP) was $2,347 million (22.3% of revenues), compared to $2,370 million (22.2% of revenues) in the prior year[21] - Adjusted EPS (non-GAAP) increased to $5.37 from $5.15 year-over-year[21] - Adjusted EPS in Q2 2024 increased 4% to $5.37 compared to $5.15 in Q2 2023[33] - Adjusted operating income for Q2 2024 was $2.35 billion, slightly down from $2.37 billion in Q2 2023[33] - Adjusted operating margin improved to 22.3% in Q2 2024 from 22.2% in Q2 2023[33] - Net income attributable to Thermo Fisher Scientific Inc. for the six months ended July 1, 2023, was $2.650 billion, compared to $2.875 billion in 2024[23] - Adjusted operating income (non-GAAP measure) for the six months ended July 1, 2023, was $4.700 billion, slightly higher than $4.625 billion in 2024[23] - Adjusted EPS (non-GAAP measure) for the six months ended July 1, 2023, was $10.18, compared to $10.47 in 2024[23] Guidance and Forecast - Thermo Fisher raised its full-year revenue guidance to a new range of $42.4 to $43.3 billion[6] - Adjusted EPS guidance for the full year was raised to a new range of $21.29 to $22.07[6] Acquisitions and Product Launches - The company completed the acquisition of Olink, a provider of next-generation proteomic solutions[4] - Thermo Fisher launched several new products, including the Thermo Scientific™ Stellar™ mass spectrometer and ENERGY STAR-certified ULT Freezers[3] Geographic Expansion - The company expanded its presence in Indonesia to support healthcare, scientific research, and renewable energy investments[14] Cash Flow and Financial Position - Free cash flow (non-GAAP) improved to $1,674 million from $1,260 million in the same period last year[21] - Free cash flow (non-GAAP measure) for the six months ended July 1, 2023, was $1.537 billion, lower than $2.583 billion in 2024[23] - Free cash flow (non-GAAP measure) increased to $2,583 million from $1,537 million[27] - Net cash provided by operating activities for the six months ended June 29, 2024, was $3,211 million, up from $2,269 million in the same period of 2023[43] - Cash, cash equivalents, and restricted cash decreased to $7,097 million at the end of June 2024 from $8,097 million at the beginning of the period[43] Costs and Expenses - Cost of revenues decreased to 57.9% of revenues from 59.2% in the prior year[21] - Research and development expenses remained stable at 3.2% of revenues[21] - Consolidated depreciation expense for 2024 was $562 million, compared to $523 million in 2023[25] - Adjusted results in 2024 and 2023 exclude charges for inventory write-downs and accelerated depreciation on manufacturing assets[24] - Adjusted results in 2024 and 2023 exclude restructuring and other costs, including severance and impairments of long-lived assets[24] Non-GAAP Measures - The company excludes acquisition-related costs and restructuring expenses from non-GAAP measures as they are not indicative of normal operating costs[44][45] - Free cash flow is reported as operating cash flow excluding net capital expenditures, indicating the company's ability to generate cash for acquisitions and other activities[46] - Non-GAAP financial measures are not considered superior to GAAP measures, with reconciliations provided in the press release[47] COVID-19 Impact - COVID-19 testing revenue declined by 1% year-over-year[22] Organic Growth - Organic revenue growth (non-GAAP) was -1%, with core organic revenue growth (non-GAAP) at 0% for the three months ended June 29, 2024[22] Balance Sheet - Total current assets as of June 29, 2024, were $25.476 billion, up from $24.589 billion as of December 31, 2023[26] - Total liabilities, redeemable noncontrolling interest, and equity as of June 29, 2024, were $98.496 billion, slightly down from $98.726 billion as of December 31, 2023[26] Company Outlook - The company has made significant progress and is well-positioned for differentiated performance in 2024[49]