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Thermo Fisher Scientific(TMO) - 2024 Q2 - Quarterly Results
TMOThermo Fisher Scientific(TMO)2024-07-24 10:03
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Revenue Performance - Second quarter revenue declined 1% to 10.54billionin2024,comparedto10.54 billion in 2024, compared to 10.69 billion in 2023[5] - Revenues for the three months ended June 29, 2024, were 10,541million,aslightdecreasefrom10,541 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 21.397billion,representingadecreasefrom21.397 billion, representing a decrease from 20.886 billion in the same period in 2024[23] - Life Sciences Solutions segment revenue decreased to 2,355million(22.32,355 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 5,758million(54.65,758 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 4.04inQ22024,comparedto4.04 in Q2 2024, compared to 3.51 in Q2 2023[16] - Adjusted EPS increased 4% to 5.37inQ22024[13]−GAAPoperatingincomegrewto5.37 in Q2 2024[13] - GAAP operating income grew to 1.82 billion in Q2 2024, compared to 1.58billioninQ22023[16]−GAAPoperatingmarginincreasedto17.31.58 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 1,361million(12.71,361 million (12.7% of revenues)[21] - Adjusted operating income (non-GAAP) was 2,347 million (22.3% of revenues), compared to 2,370million(22.22,370 million (22.2% of revenues) in the prior year[21] - Adjusted EPS (non-GAAP) increased to 5.37 from 5.15year−over−year[21]−AdjustedEPSinQ22024increased45.15 year-over-year[21] - Adjusted EPS in Q2 2024 increased 4% to 5.37 compared to 5.15inQ22023[33]−AdjustedoperatingincomeforQ22024was5.15 in Q2 2023[33] - Adjusted operating income for Q2 2024 was 2.35 billion, slightly down from 2.37billioninQ22023[33]−Adjustedoperatingmarginimprovedto22.32.37 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 2.875billionin2024[23]−Adjustedoperatingincome(non−GAAPmeasure)forthesixmonthsendedJuly1,2023,was2.875 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 4.625billionin2024[23]−AdjustedEPS(non−GAAPmeasure)forthesixmonthsendedJuly1,2023,was4.625 billion in 2024[23] - Adjusted EPS (non-GAAP measure) for the six months ended July 1, 2023, was 10.18, compared to 10.47in2024[23]GuidanceandForecast−ThermoFisherraiseditsfull−yearrevenueguidancetoanewrangeof10.47 in 2024[23] Guidance and Forecast - Thermo Fisher raised its full-year revenue guidance to a new range of 42.4 to 43.3billion[6]−AdjustedEPSguidanceforthefullyearwasraisedtoanewrangeof43.3 billion[6] - Adjusted EPS guidance for the full year was raised to a new range of 21.29 to 22.07[6]AcquisitionsandProductLaunches−ThecompanycompletedtheacquisitionofOlink,aproviderofnext−generationproteomicsolutions[4]−ThermoFisherlaunchedseveralnewproducts,includingtheThermoScientific™Stellar™massspectrometerandENERGYSTAR−certifiedULTFreezers[3]GeographicExpansion−ThecompanyexpandeditspresenceinIndonesiatosupporthealthcare,scientificresearch,andrenewableenergyinvestments[14]CashFlowandFinancialPosition−Freecashflow(non−GAAP)improvedto22.07[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 1,260millioninthesameperiodlastyear[21]−Freecashflow(non−GAAPmeasure)forthesixmonthsendedJuly1,2023,was1,260 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 2.583billionin2024[23]−Freecashflow(non−GAAPmeasure)increasedto2.583 billion in 2024[23] - Free cash flow (non-GAAP measure) increased to 2,583 million from 1,537million[27]−NetcashprovidedbyoperatingactivitiesforthesixmonthsendedJune29,2024,was1,537 million[27] - Net cash provided by operating activities for the six months ended June 29, 2024, was 3,211 million, up from 2,269millioninthesameperiodof2023[43]−Cash,cashequivalents,andrestrictedcashdecreasedto2,269 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 8,097millionatthebeginningoftheperiod[43]CostsandExpenses−Costofrevenuesdecreasedto57.98,097 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 523millionin2023[25]−Adjustedresultsin2024and2023excludechargesforinventorywrite−downsandaccelerateddepreciationonmanufacturingassets[24]−Adjustedresultsin2024and2023excluderestructuringandothercosts,includingseveranceandimpairmentsoflong−livedassets[24]Non−GAAPMeasures−Thecompanyexcludesacquisition−relatedcostsandrestructuringexpensesfromnon−GAAPmeasuresastheyarenotindicativeofnormaloperatingcosts[44][45]−Freecashflowisreportedasoperatingcashflowexcludingnetcapitalexpenditures,indicatingthecompany′sabilitytogeneratecashforacquisitionsandotheractivities[46]−Non−GAAPfinancialmeasuresarenotconsideredsuperiortoGAAPmeasures,withreconciliationsprovidedinthepressrelease[47]COVID−19Impact−COVID−19testingrevenuedeclinedby1523 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 24.589billionasofDecember31,2023[26]−Totalliabilities,redeemablenoncontrollinginterest,andequityasofJune29,2024,were24.589 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]