What to Expect from Thermo Fisher’s Third-Quarter Earnings

Thermo Fisher Scientific (TMO), a leading life sciences company, is scheduled to release its third-quarter earnings on October 24. Wall Street analysts expect the adjusted EPS to be $2.55 on revenues of $5.7 billion during the third quarter.

The above chart compares the company’s EPS and revenues since the first quarter of 2017 with the third-quarter estimates.

Thermo Fisher is expected to report 11.5% revenue growth to $5.704 billion during the third quarter—compared to $5.116 billion during the third quarter of 2017. Analysts expect growth in Thermo Fisher’s product revenues and service revenues during the third quarter.

The revenues are expected to be driven by a strong performance across all four segments—Laboratory Products and Services, Life Sciences Solutions, Analytical Instruments, and Specialty Diagnostics.

Analysts expect the gross profit margin to decrease to 47.9% during the third quarter—compared to the gross profit margin of 48.4% during the third quarter of 2017. The EBITDA margin is expected to decrease marginally to 25.0% during the third quarter—compared to 25.1% during the third quarter of 2017. The EBITDA margin is expected to decrease due to higher research and development expenses during the third quarter, partially offset by lower selling, general, and administrative expenses. The net adjusted income is expected to increase to ~$1.03 billion during the third quarter—compared to $923.5 million during the third quarter of 2017.

Notably, the First Trust US Equity Opportunities ETF (FPX) holds 3.7% of its total investments in ThermoFisher, 3.4% in Stryker (SYK), 3.7% in AbbVie (ABBV), and 4.3% in Shire (SHPG).