We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Thermo Fisher (TMO) Up 3.7% Since the Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Thermo Fisher Scientific Inc. (TMO - Free Report) . Shares have added about 3.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 catalysts.
Recent Earnings
Thermo Fisher reported better-than-expected first-quarter 2017 earnings results. Adjusted earnings per share (EPS) in the quarter came in at $2.08, exceeding the Zacks Consensus Estimate by 2.9% and ahead of the year-ago quarter figure by 15.6%.
On a reported basis, first-quarter EPS of $1.40 marked 39% year-over-year improvement.
Revenues for the quarter came in at $4.77 billion, up 11% year over year. Sales also exceeded the Zacks Consensus Estimate of $4.68 billion by 1.9%.
Quarter in Detail
Organic revenues in the first quarter grew 4% year over year. Revenues rose 8% on the back of acquisitions. Total revenue was 1%, offset by currency translation.
Thermo Fisher currently operates under four business segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Services.
Revenues from the Life Sciences Solutions Segment improved 12% year over year to $1.36 billion while Analytical Instruments Segment sales grew 39% to $1.05 billion, reflecting the acquisition of FEI Company. Revenues from the Laboratory Products and Services Segment grew 3% to $1.70 billion while the Specialty Diagnostics Segment recorded a 1% increase to $866 million.
Gross margin of 48.6% during the first quarter was up 70 basis points (bps) year over year on 12.5% rise in gross profit. Adjusted operating margin expanded approximately 53 bps to 21.2% despite the company incurring 9.8% rise in selling, general and administrative expenses and 22% increase in research and development expenses.
The company exited the first quarter with cash and cash equivalents of $713.3 million compared with $786.2 million at the end of the previous year. First-quarter operating cash flow was $361.5 million compared with the year-ago figure of $334.7 million.
Guidance Raised
Backed by a solid first-quarter performance and on a less adverse foreign exchange environment forecast, Thermo Fisher increased its full-year 2017 financial guidance. The revenue guidance has been raised to a new range of $19.51–$19.71 billion (growth of 7% to 8% from the previous year) from the earlier band of $19.38–$19.62 billion. The current Zacks Consensus Estimate of $19.53 billion remains close to the lower-end of the guided range.
The company has also increased its adjusted EPS guidance to a new range of $9.12 to $9.28, reflecting growth of 10% to 12% from the previous year (earlier prediction was $9.06 to $9.24). The Zacks Consensus Estimate of $9.16 per share also remains near the lower-end of the band.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been five upward revisions for the current quarter.
At this time, Thermo Fisher's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum 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.
Based on our scores, the stock is suitable for growth and value investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Thermo Fisher (TMO) Up 3.7% Since the Last Earnings Report?
A month has gone by since the last earnings report for Thermo Fisher Scientific Inc. (TMO - Free Report) . Shares have added about 3.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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 catalysts.
Recent Earnings
Thermo Fisher reported better-than-expected first-quarter 2017 earnings results. Adjusted earnings per share (EPS) in the quarter came in at $2.08, exceeding the Zacks Consensus Estimate by 2.9% and ahead of the year-ago quarter figure by 15.6%.
On a reported basis, first-quarter EPS of $1.40 marked 39% year-over-year improvement.
Revenues for the quarter came in at $4.77 billion, up 11% year over year. Sales also exceeded the Zacks Consensus Estimate of $4.68 billion by 1.9%.
Quarter in Detail
Organic revenues in the first quarter grew 4% year over year. Revenues rose 8% on the back of acquisitions. Total revenue was 1%, offset by currency translation.
Thermo Fisher currently operates under four business segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Services.
Revenues from the Life Sciences Solutions Segment improved 12% year over year to $1.36 billion while Analytical Instruments Segment sales grew 39% to $1.05 billion, reflecting the acquisition of FEI Company. Revenues from the Laboratory Products and Services Segment grew 3% to $1.70 billion while the Specialty Diagnostics Segment recorded a 1% increase to $866 million.
Gross margin of 48.6% during the first quarter was up 70 basis points (bps) year over year on 12.5% rise in gross profit. Adjusted operating margin expanded approximately 53 bps to 21.2% despite the company incurring 9.8% rise in selling, general and administrative expenses and 22% increase in research and development expenses.
The company exited the first quarter with cash and cash equivalents of $713.3 million compared with $786.2 million at the end of the previous year. First-quarter operating cash flow was $361.5 million compared with the year-ago figure of $334.7 million.
Guidance Raised
Backed by a solid first-quarter performance and on a less adverse foreign exchange environment forecast, Thermo Fisher increased its full-year 2017 financial guidance. The revenue guidance has been raised to a new range of $19.51–$19.71 billion (growth of 7% to 8% from the previous year) from the earlier band of $19.38–$19.62 billion. The current Zacks Consensus Estimate of $19.53 billion remains close to the lower-end of the guided range.
The company has also increased its adjusted EPS guidance to a new range of $9.12 to $9.28, reflecting growth of 10% to 12% from the previous year (earlier prediction was $9.06 to $9.24). The Zacks Consensus Estimate of $9.16 per share also remains near the lower-end of the band.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been five upward revisions for the current quarter.
Thermo Fisher Scientific Inc Price and Consensus
Thermo Fisher Scientific Inc Price and Consensus | Thermo Fisher Scientific Inc Quote
VGM Scores
At this time, Thermo Fisher's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum 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.
Based on our scores, the stock is suitable for growth and value investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.