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Why Is Thermo Fisher (TMO) Up 1.6% 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 added about 1.6% 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 its most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Beats on Q2 Earnings, Raises 2024 EPS View
Thermo Fisher Scientific Inc.'s second-quarter 2024 adjusted earnings per share (EPS) of $5.37 beat the Zacks Consensus Estimate by 4.9%. The figure also rose 4.3% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.04, up 15.1% on a year-over-year basis.
Revenues in Detail
Revenues in the quarter totaled $10.54 billion, down 1.4% year over year. The top line surpassed the Zacks Consensus Estimate by 0.3%.
Segment Details
Organic revenues in the reported quarter were 1% lower, while Core organic revenues were flat year over year.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Biopharma Services.
Revenues in the Life Sciences Solutions segment (22.3% of total revenues) declined 4.4% year over year to $2.36 billion, while Analytical Instruments Segment sales (16.9%) rose 1.9% to $1.78 billion.
Revenues in the Laboratory Products and Biopharma Services segment (54.6%) fell 1.3% to $5.76 billion. The Specialty Diagnostics segment (10.6%) registered $1.12 billion in revenues, indicating growth of 0.7% year over year.
Margin Analysis
The gross margin of 42.1% in the second quarter expanded 124 basis points (bps) year over year.
In the quarter, selling, general and administrative expenses rose 0.8% to $1.69 billion. Research and development expenses declined 1.7% to $339 million.
The adjusted operating margin in the quarter came is at 22.9%, reflecting an improvement of 90 bps.
Financial Position
The company ended second-quarter 2024 with cash and cash equivalents and short-term investments of $8.82 billion compared with $7.25 billion at the end of first-quarter 2024. Cumulative net cash from operating activities at the end of the second quarter was $3.21 billion compared with $2.27 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth being 16.39%.
Guidance
Thermo Fisher updated its 2024 guidance.
The company now expects 2024 revenues to be in the range of $42.4-$43.3 billion (tapered from the previous guided range of $42.3-$43.3 billion). The Zacks Consensus Estimate for the same is pegged at $42.9 billion.
The adjusted EPS is projected to be in the band of $21.29-$22.07 (the previous guidance was $21.14-$22.02). The Zacks Consensus Estimate for the metric is pegged at $21.6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Thermo Fisher has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Thermo Fisher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Thermo Fisher is part of the Zacks Medical - Instruments industry. Over the past month, IQVIA Holdings (IQV - Free Report) , a stock from the same industry, has gained 5.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
IQVIA reported revenues of $3.81 billion in the last reported quarter, representing a year-over-year change of +2.3%. EPS of $2.64 for the same period compares with $2.43 a year ago.
IQVIA is expected to post earnings of $2.81 per share for the current quarter, representing a year-over-year change of +12.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for IQVIA. Also, the stock has a VGM Score of C.
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Why Is Thermo Fisher (TMO) Up 1.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Thermo Fisher Scientific (TMO - Free Report) . Shares have added about 1.6% 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 its most recent earnings report in order to get a better handle on the important drivers.
Thermo Fisher Beats on Q2 Earnings, Raises 2024 EPS View
Thermo Fisher Scientific Inc.'s second-quarter 2024 adjusted earnings per share (EPS) of $5.37 beat the Zacks Consensus Estimate by 4.9%. The figure also rose 4.3% year over year.
The adjusted number excludes certain non-recurring expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.04, up 15.1% on a year-over-year basis.
Revenues in Detail
Revenues in the quarter totaled $10.54 billion, down 1.4% year over year. The top line surpassed the Zacks Consensus Estimate by 0.3%.
Segment Details
Organic revenues in the reported quarter were 1% lower, while Core organic revenues were flat year over year.
Thermo Fisher operates under four business segments — Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Biopharma Services.
Revenues in the Life Sciences Solutions segment (22.3% of total revenues) declined 4.4% year over year to $2.36 billion, while Analytical Instruments Segment sales (16.9%) rose 1.9% to $1.78 billion.
Revenues in the Laboratory Products and Biopharma Services segment (54.6%) fell 1.3% to $5.76 billion. The Specialty Diagnostics segment (10.6%) registered $1.12 billion in revenues, indicating growth of 0.7% year over year.
Margin Analysis
The gross margin of 42.1% in the second quarter expanded 124 basis points (bps) year over year.
In the quarter, selling, general and administrative expenses rose 0.8% to $1.69 billion. Research and development expenses declined 1.7% to $339 million.
The adjusted operating margin in the quarter came is at 22.9%, reflecting an improvement of 90 bps.
Financial Position
The company ended second-quarter 2024 with cash and cash equivalents and short-term investments of $8.82 billion compared with $7.25 billion at the end of first-quarter 2024. Cumulative net cash from operating activities at the end of the second quarter was $3.21 billion compared with $2.27 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth being 16.39%.
Guidance
Thermo Fisher updated its 2024 guidance.
The company now expects 2024 revenues to be in the range of $42.4-$43.3 billion (tapered from the previous guided range of $42.3-$43.3 billion). The Zacks Consensus Estimate for the same is pegged at $42.9 billion.
The adjusted EPS is projected to be in the band of $21.29-$22.07 (the previous guidance was $21.14-$22.02). The Zacks Consensus Estimate for the metric is pegged at $21.6 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Thermo Fisher has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Thermo Fisher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Thermo Fisher is part of the Zacks Medical - Instruments industry. Over the past month, IQVIA Holdings (IQV - Free Report) , a stock from the same industry, has gained 5.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
IQVIA reported revenues of $3.81 billion in the last reported quarter, representing a year-over-year change of +2.3%. EPS of $2.64 for the same period compares with $2.43 a year ago.
IQVIA is expected to post earnings of $2.81 per share for the current quarter, representing a year-over-year change of +12.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for IQVIA. Also, the stock has a VGM Score of C.