Thermo Fisher Scientific (TMO) Q3 Earnings call transcript Oct 23, 2024

Through its recent earnings call, Thermo Fisher Scientific, a leading life sciences solutions provider, showcased a strong financial performance for the third quarter of 2024. The company reported a revenue of $10.6 billion, an adjusted operating income of $2.36 billion, and an adjusted EPS of $5.28 per share. These results demonstrate Thermo Fisher Scientific's resilience and adaptability in the face of market challenges.

Financial Performance

The third quarter of 2024 saw Thermo Fisher Scientific achieve a strong financial performance, with revenue growth in all segments. The company's adjusted operating income reached $2.36 billion, marking a significant increase from the previous quarter. This success is attributed to the company's proven growth strategy, which has enabled it to navigate the evolving market conditions and capitalize on new opportunities.

End Market Performance

The company's performance across different end markets was also noteworthy. In pharmaceuticals and biotech, Thermo Fisher Scientific reported a decline in low single digits, reflecting the ongoing impact of the runoff of vaccines and therapy revenue. Despite this, the company has seen sequential improvement in growth for three consecutive quarters, highlighting its ability to adapt to market dynamics. The academic and government segment grew in the low single digits, driven by strong growth in electron microscopy and research and safety market channels. In industrial and applied, the company reported growth in the low single digits, primarily due to strong growth in electron microscopy. The diagnostics and healthcare segment, impacted by the runoff of COVID-19 testing-related revenue, showed flat growth. However, the company noted positive growth in transplant diagnostics and immunodiagnostics businesses.

Innovation and Growth Strategy

Thermo Fisher Scientific's commitment to innovation was evident in the call, with the company highlighting several high-impact innovations. The launch of the Thermo Scientific Iliad scanning transmission electron microscope and the Applied Biosystems MagMAX Sequential DNA/RNA kit are examples of Thermo Fisher Scientific's ongoing efforts to drive innovation and differentiation in the market. Additionally, the company's strategy of leveraging its trusted partner status with customers and its unparalleled commercial engine is paying off, with strong commercial wins and increased market share.

Outlook and Future Plans

Looking ahead, Thermo Fisher Scientific is optimistic about its future prospects. The company has raised its adjusted EPS guidance for the year, reflecting its confidence in its financial performance. Thermo Fisher Scientific is also investing in strategic areas, such as expanding its pharma services manufacturing footprint and its global laboratory services network, to meet the evolving needs of its customers.

Challenges and Opportunities

Despite the challenges posed by market conditions and the impact of the pandemic on certain segments, Thermo Fisher Scientific remains confident in its ability to navigate these challenges and capitalize on opportunities. The company's focus on innovation, its trusted partner status with customers, and its unparalleled commercial engine are key strengths that will help it continue to deliver differentiated performance.

Conclusion

Thermo Fisher Scientific's third quarter earnings call highlighted the company's strong financial performance, strategic focus, and commitment to innovation. Despite facing challenges, the company has demonstrated its resilience and ability to adapt to market dynamics. With a clear outlook for the future and a strong strategic direction, Thermo Fisher Scientific is well-positioned to continue delivering value to its stakeholders and contributing to the advancement of science and healthcare.