Headline: Thermo Fisher Boosts Profit Forecast Amid Surging Equipment Demand
Leading scientific equipment and services provider Thermo Fisher Scientific has revised the lower end of its annual profit forecast upwards, now expecting annual earnings per share in the range of $21.35 to $22.07. This update reflects an increase from the previously estimated range of $21.29 to $22.07 per share. Announced on Wednesday, this adjustment marks the third upward revision of its profit forecast this year, underscoring the company's confidence in the growing demand for its products and services.
This decision comes after a challenging period for contract drug manufacturers, which saw reduced spending from biotech customers over the past year. However, recent interest rate cuts may lower borrowing costs for biotech firms, improving the financing environment and potentially increasing spending on Thermo Fisher's tools and services.
Contrary to its profit forecast, Thermo Fisher has maintained its annual revenue projection in the range of $42.4 billion to $43.3 billion. According to LSEG data, analysts anticipated earnings of $21.72 per share on revenue of $42.91 billion for the year.
In the third quarter, Thermo Fisher reported $5.74 billion in sales from its laboratory products segment, which provides products and services for clinical trials and drug development. This figure surpassed analysts' expectations of $5.45 billion, highlighting the significant contribution of this segment, which accounts for more than half of the company's total sales.
Despite these strong segment results, Thermo Fisher's overall third-quarter revenue slightly missed expectations, coming in at $10.60 billion compared to the expected $10.64 billion. The Waltham, Massachusetts-based company achieved adjusted earnings of $5.28 per share for the quarter ending September 28, narrowly exceeding the consensus estimate of $5.25 per share.
The company's performance and optimistic outlook align with the broader life sciences industry. Last week, European rival Sartorius reported better-than-expected bioprocess order intake in its nine-month results, positively impacting the share values of similar firms like Thermo Fisher, Danaher, and Waters. Citi analysts described these results as a favorable indicator for companies operating in the bioprocess sector.
In related industry news, Thermo Fisher's competitor Danaher recently exceeded Wall Street's profit and revenue expectations but noted it hasn't seen significant demand growth from smaller biotech companies and highlighted weaknesses in the Chinese market.