Thermo Fisher Scientific Inc. (NYSE: TMO ) has been one of the best-performing stocks over the last decade, with shares returning more than 420% over this period. I've written about investing for Seeking Alpha since 2015 and for Sure Dividend since 2018. I focus primarily on owning shares of companies that have demonstrated long histories of dividend growth. These types of companies have largely proven successful at raising dividends through multiple recessionary periods, a sign that their business models a ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Thermo Fisher Scientific (TMO) , which belongs to the Zacks Medical - Instruments industry, could be a great candidate to consider. When looking at the last two reports, this maker of scientific instrument and laboratory supplies has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 6.70%, on average, in the ...

Thermo Fisher Scientific (TMO) announced the launch of the international CorEvitas Adolescent Atopic Dermatitis (AD) Registry, designed to study novel treatments for the most common inflammatory skin condition in adolescent patients. The registry fills a significant gap for real-world evidence and adolescentspecific developmental and safety data related to novel therapies for AD, complementing the existing adult CorEvitas AD Registry launched in 2020. CorEvitas, acquired in August 2023, is part of Thermo Fi ...

Thermo Fisher Scientific's (TMO) PPD clinical research business has expanded its global laboratory services by opening a new bioanalytical lab in GoCo Health Innovation City in Gothenburg, Sweden. The 29,000- square-foot facility will serve pharmaceutical and biotech customers with advanced laboratory services and cutting-edge instrumentation across all phases of pharmaceutical development to help deliver life-changing medicines to patients worldwide. The latest development furthers the company's strategy t ...

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].

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]

Core Insights - Thermo Fisher Scientific reported revenue of $10.54 billion for the quarter ended June 2024, reflecting a year-over-year decline of 1.4% [5] - The reported EPS was $5.37, an increase from $5.15 a year ago, indicating a positive surprise of +4.68% over the consensus estimate of $5.13 [1][5] Revenue Breakdown - Organic revenue growth was -1%, slightly better than the average estimate of -1.6% [3] - Laboratory Products and Biopharma Services generated $5.76 billion, exceeding the average estimate of $5.75 billion, with a year-over-year change of -1.3% [3] - Specialty Diagnostics revenue was $1.12 billion, surpassing the average estimate of $1.10 billion, showing a year-over-year increase of +0.7% [3] - Life Sciences Solutions reported revenues of $2.36 billion, matching the average estimate but reflecting a year-over-year decline of -4.4% [3] - Eliminations accounted for -$470 million, slightly worse than the average estimate of -$453.83 million, but showing a year-over-year improvement of +1.1% [3] - Analytical Instruments revenue was $1.78 billion, slightly above the average estimate of $1.77 billion, with a year-over-year increase of +1.9% [3] Stock Performance - Over the past month, Thermo Fisher shares returned -0.8%, underperforming compared to the Zacks S&P 500 composite's +1.8% change [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

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]