Thermo Fisher (TMO) Up 1.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Thermo Fisher Scientific Inc. has shown a positive trend in its stock performance, with shares increasing by approximately 1.8% since the last earnings report, outperforming the S&P 500 [1][2]. Financial Performance - The second-quarter 2025 adjusted earnings per share (EPS) for Thermo Fisher was $5.36, exceeding the Zacks Consensus Estimate by 2.7%, although it represented a 0.2% decrease year over year [3]. - Total revenues for the quarter rose by 2.9% year over year to $10.85 billion, surpassing the Zacks Consensus Estimate by 1.9% [4]. - Organic revenues increased by 2% year over year [4]. Segment Analysis - Life Sciences Solutions segment (23% of total revenues) saw a revenue increase of 6.1% year over year to $2.50 billion, exceeding estimates [5]. - Analytical Instruments segment (15.9% of total revenues) experienced a revenue decline of 3% year over year to $1.73 billion, missing estimates [6]. - Specialty Diagnostics segment (10.4% of total revenues) reported a revenue increase of 1.5% year over year to $1.13 billion, falling short of estimates [7]. - Laboratory Products and Biopharma Services segment (55.2% of total revenues) had revenues rise by 4.1% year over year to $5.99 billion, exceeding estimates [8]. Margin Performance - Gross margin for the second quarter was 41.2%, a contraction of 83 basis points year over year, attributed to a 4.4% increase in the cost of revenues [9]. - Selling, general, and administrative expenses rose by 5.4% to $1.78 billion, while research and development expenses increased by 3.8% to $352 million [9]. - The adjusted operating margin was 21.6%, reflecting a contraction of 124 basis points [9]. Financial Position - At the end of the second quarter of 2025, cash and cash equivalents and short-term investments totaled $6.39 billion, up from $5.95 billion at the end of the first quarter [10]. - Cumulative net cash from operating activities was $2.12 billion, down from $3.21 billion a year ago [10]. - The company has a consistent dividend-paying history, with a five-year annualized dividend growth of 14.86% [10]. Market Sentiment - There has been a downward trend in estimates for Thermo Fisher in the past month [11]. - The company currently holds a subpar Growth Score of D and a Momentum Score of F, with a value grade of C, placing it in the middle 20% for this investment strategy [12]. - Estimates have been trending downward, indicating a potential shift in market sentiment, with a Zacks Rank of 3 (Hold) suggesting an expectation of in-line returns in the coming months [13].