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Why Thermo Fisher Scientific Raised Guidance after 2Q17 Results

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Part 2
Why Thermo Fisher Scientific Raised Guidance after 2Q17 Results PART 2 OF 4

Key Highlights from Thermo Fisher Scientific’s 2Q17 Earnings

EPS estimates

Thermo Fisher Scientific (TMO) reported its 2Q17 earnings on July 26, 2017. The company posted diluted adjusted EPS (earnings per share) of $2.3 in 2Q17, a ~13% YoY (year-over-year) increase. The GAAP EPS came in at ~$1.56, a ~20% YoY increase.

Key Highlights from Thermo Fisher Scientific’s 2Q17 Earnings

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As the above graph shows, Thermo Fisher Scientific’s EPS of $2.3 in 2Q17 exceeded Wall Street analysts’ estimates of $2.27. In 2Q17, currency headwinds had an approximately $0.01 higher impact on the earnings than anticipated. However, the company’s EPS in the quarter came in approximately $0.04 higher than the midpoint of the company’s guidance range. The robust earnings reported in the quarter were driven by the company’s strong operational performance. The acquisition of FEI contributed significantly to Thermo Fisher Scientific’s earnings in the quarter. For details about the deal, read Thermo Fisher Scientific Completed the FEI Acquisition.

Key Highlights from Thermo Fisher Scientific’s 2Q17 Earnings

Revenue estimates

In 2Q17, Thermo Fisher Scientific earned revenues of ~$5.0 billion. It registered a YoY rise of ~10% on a reported basis. The company’s organic growth in the quarter was ~4%. It had an approximately 1% negative impact of currency headwinds and a contribution of ~8% from acquisitions. The currency headwinds impacted the company’s revenues by $50 million less than expected.

As the above graph shows, Thermo Fisher Scientific’s actual revenues in 2Q17 exceeded Wall Street analysts’ estimates. All of Thermo Fisher Scientific’s business segments registered revenue growth during the quarter. The company reported a high-single-digit growth in Asia-Pacific, while Europe grew in the low single digits. China sales continued to register mid-teen growth. North America grew at the company’s average rate. The rest of the world reported flat sales.

Peers Abbott Laboratories (ABT), Agilent Technologies (A), and Zimmer Biomet Holdings (ZBH) earned revenues of ~$6.7 billion, $1.1 billion, and $2 billion, respectively, in their recently ended quarters.

Investors interested in gaining diversified exposure to Thermo Fisher Scientific can consider the iShares Core S&P 500 ETF (IVV). Thermo Fisher Scientific accounts for about 0.32% of IVV’s total holdings.

In the next article, we’ll discuss the company’s increased guidance for 2017.

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