What drives TMO's consistent EPS growth?

Thermo Fisher Scientific's (TMO) consistent EPS growth can be attributed to several key factors:

1. **Revenue Growth in Key Segments**: The company's Laboratory Products and Biopharma Services segment contributed significantly to revenue, with a total of $23.2 billion in revenue, accounting for 54% of the total revenue. This segment's performance, along with the growth in other segments, has supported EPS growth.
2. **Strategic Acquisitions**: TMO's acquisition of Solventum's Purification & Filtration business for approximately $4.1 billion is expected to generate mid- to high-single digit organic growth and will be accretive to adjusted EPS. Such strategic moves enhance TMO's market position and expand its capabilities, contributing to EPS growth.
3. **Innovation and Product Launches**: TMO has launched innovative products like the Thermo Scientific Stellar mass spectrometer and the Thermo Scientific Iliad Scanning Transmission Electron Microscope, which likely contribute to increased profitability and EPS growth.
4. **Financial Health and Shareholder Returns**: The company's strong financial health is reflected in its dividend and stock repurchase activity, with an 11% increase in dividend and a significant $3.0 billion stock repurchase during Q1 2024. This commitment to returning value to shareholders can enhance EPS growth by reducing the number of shares outstanding.
5. **Operational Efficiency and Margin Improvement**: TMO has seen improvements in operating margin, with GAAP operating margin increasing to 16.1% and adjusted operating margin to 22.0%. Enhanced operational efficiency contributes to higher EPS by reducing costs and increasing profitability.

In summary, TMO's consistent EPS growth is driven by a combination of revenue growth from key segments, strategic acquisitions, innovation, financial health, and operational efficiency. These factors collectively support the company's EPS growth and overall financial performance.