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Why Is Thermo Fisher (TMO) Down 6.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Thermo Fisher Scientific (TMO - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Thermo Fisher due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Q4 Earnings Beat Estimates, Margins Down
Thermo Fisher Scientific Inc.'s fourth-quarter 2021 adjusted earnings per share of $6.54 beat the Zacks Consensus Estimate by 25.3%. However, the figure declined 7.8% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP earnings per share was $4.17, reflecting a 33.2% drop on a year-over-year basis.
The significant contribution from COVID-19 response revenues as well as acceleration in the company’s base business drove the company’s bottom line in the fourth quarter.
For the full year, adjusted earnings were $25.13 per share, reflecting a 28.5% rise from the year-ago period. It also beat the Zacks Consensus Estimate by 5.8%.
Revenues in Detail
Revenues in the quarter under review grossed $10.70 billion, up 1.4% year over year. The top line exceeded the Zacks Consensus Estimate by 18.6%.
Total revenues for 2021 were $39.21 billion, reflecting a 21.7% rise from the year-ago period. The figure beat the Zacks Consensus Estimate by 4.6%.
Segment Details
Organic revenues in the reported quarter fell 4% year over year, while currency translation lowered revenues by 1%. Acquisitions contributed 6% to the top line and organic revenue growth from the base business grew 8%. The company generated $2.45 billion of COVID-19 response revenues (effects of COVID-19 response revenues from acquired businesses and foreign currency translation) in the reported quarter.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Biopharma Services.
Revenues at the Life Sciences Solutions segment (38.8% of total revenues) declined 4.9% year over year to $4.15 billion while Analytical Instruments Segment sales (16.1%) improved 5.4% to $1.73 billion.
Revenues at the Laboratory Products and Biopharma Services segment (39.2%) rose 16% to $4.19 billion. The Specialty Diagnostics segment (13.5%) recorded a 26.4% year-over-year fall in revenues to $1.45 billion.
Margin Analysis
Gross margin of 50.5% in the fourth quarter contracted 341 basis points (bps) year over year on a 4.9% drop in gross profits.
In the quarter, selling, general and administrative expenses increased 9.2% to $1.96 billion. Research and development expenses were $392 million, up 4.3% year over year.
Adjusted operating margin for the quarter came in at 28.5%, reflecting a contraction of 481 bps.
Financial Position
The company exited 2021 with cash and cash equivalents of $4.48 billion compared with $12.03 billion at the end of the third quarter.
Cumulative net cash provided by operating activities was $9.54 billion compared with $8.29 billion a year ago.
Meanwhile, Thermo Fisher has a consistent dividend-paying history with five-year annualized dividend growth being 13.9%.
Guidance
Thermo Fisher has raised the outlook for 2022, given the robust performance of its core business and an increase in the assumption for COVID-19 testing-related revenues.
The company has increased revenue guidance for 2022 by $1.5 billion to $42 billion, indicating 7% reported growth over 2021. Full-year adjusted EPS guidance has been raised by $1.07 to $22.43.
The current Zacks Consensus Estimate for adjusted earnings and revenues is pegged at $22.28 and $40.04 billion, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 29.54% due to these changes.
VGM Scores
Currently, Thermo Fisher has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. Notably, Thermo Fisher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Thermo Fisher (TMO) Down 6.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Thermo Fisher Scientific (TMO - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Thermo Fisher due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Q4 Earnings Beat Estimates, Margins Down
Thermo Fisher Scientific Inc.'s fourth-quarter 2021 adjusted earnings per share of $6.54 beat the Zacks Consensus Estimate by 25.3%. However, the figure declined 7.8% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP earnings per share was $4.17, reflecting a 33.2% drop on a year-over-year basis.
The significant contribution from COVID-19 response revenues as well as acceleration in the company’s base business drove the company’s bottom line in the fourth quarter.
For the full year, adjusted earnings were $25.13 per share, reflecting a 28.5% rise from the year-ago period. It also beat the Zacks Consensus Estimate by 5.8%.
Revenues in Detail
Revenues in the quarter under review grossed $10.70 billion, up 1.4% year over year. The top line exceeded the Zacks Consensus Estimate by 18.6%.
Total revenues for 2021 were $39.21 billion, reflecting a 21.7% rise from the year-ago period. The figure beat the Zacks Consensus Estimate by 4.6%.
Segment Details
Organic revenues in the reported quarter fell 4% year over year, while currency translation lowered revenues by 1%. Acquisitions contributed 6% to the top line and organic revenue growth from the base business grew 8%. The company generated $2.45 billion of COVID-19 response revenues (effects of COVID-19 response revenues from acquired businesses and foreign currency translation) in the reported quarter.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Biopharma Services.
Revenues at the Life Sciences Solutions segment (38.8% of total revenues) declined 4.9% year over year to $4.15 billion while Analytical Instruments Segment sales (16.1%) improved 5.4% to $1.73 billion.
Revenues at the Laboratory Products and Biopharma Services segment (39.2%) rose 16% to $4.19 billion. The Specialty Diagnostics segment (13.5%) recorded a 26.4% year-over-year fall in revenues to $1.45 billion.
Margin Analysis
Gross margin of 50.5% in the fourth quarter contracted 341 basis points (bps) year over year on a 4.9% drop in gross profits.
In the quarter, selling, general and administrative expenses increased 9.2% to $1.96 billion. Research and development expenses were $392 million, up 4.3% year over year.
Adjusted operating margin for the quarter came in at 28.5%, reflecting a contraction of 481 bps.
Financial Position
The company exited 2021 with cash and cash equivalents of $4.48 billion compared with $12.03 billion at the end of the third quarter.
Cumulative net cash provided by operating activities was $9.54 billion compared with $8.29 billion a year ago.
Meanwhile, Thermo Fisher has a consistent dividend-paying history with five-year annualized dividend growth being 13.9%.
Guidance
Thermo Fisher has raised the outlook for 2022, given the robust performance of its core business and an increase in the assumption for COVID-19 testing-related revenues.
The company has increased revenue guidance for 2022 by $1.5 billion to $42 billion, indicating 7% reported growth over 2021. Full-year adjusted EPS guidance has been raised by $1.07 to $22.43.
The current Zacks Consensus Estimate for adjusted earnings and revenues is pegged at $22.28 and $40.04 billion, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 29.54% due to these changes.
VGM Scores
Currently, Thermo Fisher has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. Notably, Thermo Fisher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.