Robust Analytical Instrument Segment Likely to Aid TMO's Q3 Earnings
Thermo Fisher Scientific Inc. TMO is slated to release third-quarter 2024 results on Oct. 23, before market open.
Thermo Fisher’s second-quarter earnings of $5.37 per share beat the Zacks Consensus Estimate by 4.7%. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.98%.
TMO’s Q3 Estimates
The Zacks Consensus Estimate for revenues is pegged at $10.64 billion, suggesting 0.6% growth from the prior-year quarter’s reported figure. The consensus mark for earnings is pegged at $5.25 per share, indicating a 7.7% decline from the year-ago quarter’s reported numbers.
Estimate Revision Trend Ahead of Earnings
Estimates for Thermo Fisher’s third-quarter earnings have moved south 0.6% to $5.25 per share in the past 30 days.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Now, let's look at how things might have progressed for the MedTech major prior to the announcement.
Factors at Play
Thermo Fisher’s Analytical Instruments segment is expected to have generated strong third-quarter sales banking on its newly launched cutting-edge technologies during the previous quarter. In the second quarter, the company introduced Thermo Scientific Stellar Mass Spectrometer, which substantiated its leadership in proteomics.
TMO also launched three new build-for-purpose editions of the ThermoScientific Orbitrap Ascend Tribrid Mass Spectrometer during the quarter. These instruments continue to boost the company’s industry-leading Thermo Scientific Orbitrap portfolio. We expect these developments to have contributed to TMO’s third-quarter revenues.
Per our model, Thermo Fisher’s Analytical Instruments business should earn $1.9 billion in revenues, suggesting 12.7% growth year over year.
Within the Life-Science Solutions segment, the company is likely to have experienced a sales decline due to the runoff of pandemic-related revenues. In May 2023, WHO declared an end to COVID-19 as a public health emergency.
Meanwhile, the bioprodution business has likely grown in the third quarter, banking on strong adoption in the pharma and biotech segment. Within this business, in the second quarter, the company introduced a first-of-its-kind bio-based film for single-use technologies. These new bioprocess containers use plant-based materials rather than fossil fuel materials to provide lower-carbon solutions for biologics manufacturers.
Meanwhile, TMO is expected to have gained from its recent successful acquisition of Olink Holding AB. Olink is now part of the Life Sciences Solutions segment.
Per our model, the Life-Science Solutions business is expected to have generated $2.5 billion in revenues for the second quarter, calling for a 2% improvement year over year.
The Specialty Diagnostics segment (Clinical Diagnostics business from the molecular controls that go into testing kits) is expected to have gained positive contributions, led by the transplant diagnostics and immunodiagnostics businesses as well as the healthcare market channel. During the third quarter, Thermo Fisher launched the international CorEvitas Adolescent Atopic Dermatitis (AD) Registry, designed to study novel treatments for the most common inflammatory skin conditions in adolescent patients.
Thermo Fisher Scientific Inc. Price and EPS Surprise
Thermo Fisher Scientific Inc. price-eps-surprise | Thermo Fisher Scientific Inc. Quote
Additionally, the company partnered with the National Cancer Institute on the myeloMATCH (Molecular Analysis for Therapy Choice) precision medicine umbrella trial. The company also launched a pre-transplant risk assessment assay to help assess the risk of early acute rejection in kidney transplant recipients. Moreover, it secured 510(k) FDA clearance for SeCore CDx HLA A Sequencing System for synovial sarcoma. TMO received extended 510k FDA clearance for its Freelite Assays, used for evaluating monoclonal gammopathy of undetermined significance. We expect these recent developments to have had a positive impact on the company’s third-quarter top-line performance.
Our model projects TMO’s Specialty Diagnostics business to report $1 billion in revenues, suggesting a 3.1% decline year over year.
Within the Laboratory Products and Services segment, revenues are expected to have declined due to a reduction in vaccine and therapy revenues.
Meanwhile, earlier in the second quarter, Thermo Fisher launched a new line of Energy Star-certified Thermo Scientific TSX universal series ULT freezers to help labs meet their sustainability goals. This might have aided the top-line performance.
During the third quarter, the company opened its first electron microscopy demo center, NanoPort, in Taiwan. The new center is now one of the six Thermo Fisher NanoPort facilities worldwide and will partner with regional semiconductor customers.
TMO also expanded its global laboratory services with a new bioanalytical lab in GoCo Health Innovation City in Gothenburg, Sweden. This, too, while strengthening the company’s foothold in Taiwan, might have had a favorable impact on TMO’s top line in the reported quarter.
Our model expects TMO’s Laboratory Products and Services business’ third-quarter revenues to be $5.6 billion, suggesting a 2.5% decline year over year.
What Our Quantitative Model Predicts
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. This is the case here, as you will see below.
Earnings ESP: Thermo Fisher has an Earnings ESP of 0.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this reporting cycle.
ACADIA Pharmaceuticals ACAD has an Earnings ESP of +0.92% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to release third-quarter 2024 results on Nov. 7. The Zacks Consensus Estimate for third-quarter EPS implies a surge of 127.5% from the year-ago quarter’s reported figure.
DiaMedica Therapeutics DMAC has an Earnings ESP of +10.35% and a Zacks Rank #1 at present. The company is expected to release third-quarter 2024 results on Nov. 11. HCA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.39%.
TransMedics Group TMDX has an Earnings ESP of +26.63% and a Zacks Rank #3 at present. The company is likely to release third-quarter 2024 results on Nov. 4. The Zacks Consensus Estimate for the company’s second-quarter EPS implies a surge of 333.3% from the year-ago quarter’s reported figure.
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Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
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