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Thermo Fisher Scientific’s 2Q16 Revenues: What’s in Store?

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Revenue estimates

On July 28, 2016, Thermo Fisher Scientific (TMO) will announce its 2Q16 earnings for 2Q16, which ended June 30, 2016. Wall Street analysts expect Thermo Fisher’s 2Q16 revenue to be about $4.5 billion. That’s ~5.3% YoY (year-over-year) growth. In comparison, the company registered YoY growth of ~9.6% in the previous quarter.

The above graph shows analysts’ estimates for Thermo Fisher compared to actual reported revenues. Revenue estimates for 2Q16 account for the following:

  • incremental cost synergies
  • new product launches
  • continued strong-end markets, especially biotechnology end markets
  • expansion in emerging markets
  • strategic partnerships and collaborations aimed at providing comprehensive and value-based solutions to customers

However, the low organic growth comp (comparable) in 2Q16 will weigh down the company’s revenues.

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Company guidance

For fiscal 2016, Thermo Fisher Scientific is expected to generate an organic sales growth of 4%. The company expects to register reported revenue growth of 5%–6% for 2016. Reported revenue estimates include the negative impact of currency headwinds amounting to approximately 0.5%. Acquisitions are expected to have a positive impact of approximately 2% on 2016 revenues.

Investors can gain exposure to Thermo Fisher Scientific by investing in the Health Care Select Sector SPDR ETF (XLV), which holds approximately 2.1%, 0.5%, 1.9%, and 1.3% of its holdings in Thermo Fisher Scientific, Agilent Technologies (A), Abbott Laboratories (ABT), and Becton Dickinson (BDX), respectively.

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