Thermo Fisher Scientific ($TMO), a leading medical-device manufacturer, has revised its full-year earnings forecast upward, driven by robust second-quarter results that exceeded Wall Street's predictions. The company's new guidance suggests adjusted earnings per share (EPS) will range between $21.29 and $22.07 for the fiscal year 2024, an increase from its previous estimate of $21.14 to $22.02.
Additionally, Thermo Fisher anticipates revenue will fall between $42.4 billion and $43.3 billion, signaling a more optimistic outlook than the prior revenue forecast of $42.3 billion. According to consensus estimates from Capital IQ, the normalized EPS is projected at $21.69 while revenue expectation stands at $42.98 billion.
Despite this increased revenue guidance, Chief Financial Officer Stephen Williamson clarified during the earnings call that the core organic revenue growth projection remains unchanged, indicating a range from minus 1% to positive 1% for the upcoming year. Williamson also expressed that the market is expected to see a decline in low single digits this year. In the three months leading up to June 29, adjusted EPS saw a rise, reaching $5.37 compared to $5.15 in the same quarter of the previous year, surpassing the analyst estimate of $5.13.
However, revenue dipped by 1%, amounting to $10.54 billion, yet still exceeded expectations of $10.52 billion. Breaking down the revenue by segment reveals that the life sciences and solutions sector experienced a decline, with revenue falling to $2.36 billion from $2.46 billion year-over-year. This downturn was attributed to the pandemic's lingering effects, despite growth gains in biosciences, as Williamson indicated during the call.
Conversely, the analytical instruments division saw a 2% revenue increase to $1.78 billion, largely supported by advancements in electron microscopy. Sales from laboratory products and biopharma services decreased by 1% to $5.76 billion, a trend linked to the diminishing demand for vaccines and therapies.
Meanwhile, specialty diagnostics made slight gains, increasing to $1.12 billion from $1.11 billion in the previous year. The adjusted operating margin improved by 10 basis points year-over-year, reaching 22.3% in the second quarter. Operating costs and expenses also saw a reduction, dropping to $8.72 billion from $9.11 billion recorded in the prior year, showcasing the company's commitment to efficiency. Chief Executive Marc Casper highlighted the effectiveness of Thermo Fisher's growth strategy and practical process improvement initiatives in driving this performance, emphasizing continued confidence in the company's financial direction..