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Thermo Fisher (TMO) Up 2.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Thermo Fisher Scientific (TMO - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Thermo Fisher due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Beats on Q2 Earnings on Growth In Life Sciences
Thermo Fisher Scientific's second-quarter 2020 adjusted earnings per share of $3.89 beat the Zacks Consensus Estimate by 45.7%. The figure improved 27.9% year over year. The adjusted number excludes certain non-recurring expenses including, asset amortization costs and certain restructuring costs.
On a reported basis, earnings per share were $2.90, up 4.7% year over year.
Revenues in the quarter under review grossed $6.92 billion, up 9.5% year over year. The top line edged past the Zacks Consensus Estimate by 0.1%.
Quarter in Detail
Organic revenues in the reported quarter grew 11% year over year. However, currency translation adversely impacted total revenues by 1%.
Thermo Fisher operates under four business segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services.
Revenues at the Life Sciences Solutions segment (37.6% of total revenues) improved 52.2% year over year to $2.60 billion while Analytical Instruments Segment sales (15.2%) declined 20.6% to $1.05 billion.
Revenues at the Laboratory Products and Services segment (40.3%) rose 5.8% to $2.79 billion. The Specialty Diagnostics segment (14.3%) recorded 4.8% year-over-year rise in revenues to $0.99 billion.
Gross margin of 50.6% in the second quarter expanded 394 basis points (bps) year over year on 18.8% rise in gross profits. Adjusted operating margin for the quarter came in at 26.3%, reflecting an expansion of 350 bps.
The company exited the second quarter of 2020 with cash and cash equivalents of $5.82 billion compared with $2.98 billion at the end of the first quarter. Year-to-date net cash provided by operating activities was $2.24 billion compared with $1.94 billion a year ago.
No Guidance Update
We note that on Apr 6, 2020, Thermo Fisher had withdrawn its 2020 guidance due to the COVID-19 pandemic-led crisis and related customer impact. The company has not mentioned anything about its rest of the year’s projection in this earnings release.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 30.04% due to these changes.
VGM Scores
Currently, Thermo Fisher has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Thermo Fisher has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Thermo Fisher (TMO) Up 2.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Thermo Fisher Scientific (TMO - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Thermo Fisher due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Beats on Q2 Earnings on Growth In Life Sciences
Thermo Fisher Scientific's second-quarter 2020 adjusted earnings per share of $3.89 beat the Zacks Consensus Estimate by 45.7%. The figure improved 27.9% year over year. The adjusted number excludes certain non-recurring expenses including, asset amortization costs and certain restructuring costs.
On a reported basis, earnings per share were $2.90, up 4.7% year over year.
Revenues in the quarter under review grossed $6.92 billion, up 9.5% year over year. The top line edged past the Zacks Consensus Estimate by 0.1%.
Quarter in Detail
Organic revenues in the reported quarter grew 11% year over year. However, currency translation adversely impacted total revenues by 1%.
Thermo Fisher operates under four business segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services.
Revenues at the Life Sciences Solutions segment (37.6% of total revenues) improved 52.2% year over year to $2.60 billion while Analytical Instruments Segment sales (15.2%) declined 20.6% to $1.05 billion.
Revenues at the Laboratory Products and Services segment (40.3%) rose 5.8% to $2.79 billion. The Specialty Diagnostics segment (14.3%) recorded 4.8% year-over-year rise in revenues to $0.99 billion.
Gross margin of 50.6% in the second quarter expanded 394 basis points (bps) year over year on 18.8% rise in gross profits. Adjusted operating margin for the quarter came in at 26.3%, reflecting an expansion of 350 bps.
The company exited the second quarter of 2020 with cash and cash equivalents of $5.82 billion compared with $2.98 billion at the end of the first quarter. Year-to-date net cash provided by operating activities was $2.24 billion compared with $1.94 billion a year ago.
No Guidance Update
We note that on Apr 6, 2020, Thermo Fisher had withdrawn its 2020 guidance due to the COVID-19 pandemic-led crisis and related customer impact. The company has not mentioned anything about its rest of the year’s projection in this earnings release.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 30.04% due to these changes.
VGM Scores
Currently, Thermo Fisher has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Thermo Fisher has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.