Thermo Fisher’s Earnings Beat Expectations in Q4 2024

Thermo Fisher Scientific Inc.‘s TMO fourth-quarter 2024 adjusted earnings per share (EPS) reached $6.10, exceeding the Zacks Consensus Estimate by 2.9% and marking a 7.6% increase year over year.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

This adjusted figure excludes some expenses, including asset amortization and certain restructuring costs. In terms of GAAP EPS, the company posted $4.78, reflecting a year-over-year increase of 13.8%.

For the full year, the adjusted EPS was $21.86, a 1.4% increase from the previous year and 0.8% higher than the Zacks Consensus Estimate. Following the earnings report, TMO shares saw a slight increase of 1.2% in pre-market trading.

Quarterly Revenue Breakdown

Revenues for the fourth quarter grew by 4.6% year over year, totaling $11.39 billion. This figure surpassed the Zacks Consensus Estimate by 1.2%.

Organic revenues increased by 4%, while core organic revenues grew by 5%. For the full year, total revenues amounted to $42.88 billion, slightly up 0.05% from 2023 and exceeding the consensus estimate by 0.3%.

Segment Performance Insights

Thermo Fisher operates through four main segments:

Life Sciences Solutions

This segment, which accounts for 22.9% of total revenues, reported a 5.3% year-over-year increase to $2.60 billion, though it fell short of the projected $2.65 billion.

Analytical Instruments

Revenues in this segment, comprising 19.2% of the total, rose by 7.3% to $2.19 billion, aligning with expectations.

Specialty Diagnostics

This segment, accounting for 10.2% of revenues, experienced a revenue increase of 5.4% year over year to $1.16 billion, surpassing the expected $1.13 billion.

Laboratory Products and Biopharma Services

In this largest segment, which makes up 52.1% of total revenues, sales increased by 3.8% to $5.94 billion, exceeding the projected $5.72 billion.

Margin Analysis

The gross margin in Q4 stood at 43%, an increase of 173 basis points year over year, despite a 1.6% rise in costs of revenue. Selling, general and administrative expenses rose by 10.4% to $1.85 billion, while research and development costs increased by 14.4% to $374 million.

The adjusted operating margin improved to 23.5%, an expansion of 61 basis points from the previous year.

Price, Consensus, and EPS Surprise

Thermo Fisher Scientific Inc. price-consensus-eps-surprise-chart | Thermo Fisher Scientific Inc. Quote

Financial Status

As of the end of Q4 2024, Thermo Fisher reported cash and equivalents totaling $5.56 billion, down from $8.08 billion at the close of Q4 2023. Net cash from operating activities finished at $3.29 billion compared to $3.72 billion a year earlier.

The company is known for its reliable dividend payments, boasting a five-year annualized dividend growth of 14.89%.

Outlook for Thermo Fisher Stock

Thermo Fisher’s fourth-quarter results exceeded expectations in both earnings and revenue, with all segments showing growth. The expansion of margins during the quarter is also a positive sign. The company is set to provide guidance for 2025 during today’s earnings call.

In 2024, Thermo Fisher made strides in its growth strategy by launching innovative products, such as the Thermo Scientific Iliad (Scanning) Transmission Electron Microscope and the Thermo Scientific Stellar mass spectrometer. Furthermore, the acquisition of Olink, a provider of solutions for proteomics research, contributed significantly to its commercial success in the year.

Zacks Rank and Noteworthy Stock Picks

Currently, Thermo Fisher holds a Zacks Rank #4 (Sell).

Other notable stocks in the medical sector include Veracyte VCYT, Cardinal Health CAH, and Haemonetics HAE.

Veracyte currently has a Zacks Rank #1 (Strong Buy) and reported a third-quarter 2024 adjusted EPS of 19 cents, beating the Zacks Consensus Estimate by 850%, with revenues of $115.9 million exceeding expectations by 5.8%. The company’s earnings growth rate is estimated at 137.2% for 2024.

Cardinal Health, with a Zacks Rank #2 (Buy), announced a first-quarter fiscal 2025 adjusted EPS of $1.88, above the consensus by 9.8%. Revenues reached $52.28 billion, exceeding estimates by 2% and projecting long-term earnings growth of 10.5%.

Haemonetics, which also carries a Zacks Rank #2, is another stock to watch in this sector.