This article has been updated with information from Thermo Fisher's earnings conference call.
NEW YORK – Thermo Fisher Scientific on Thursday morning reported a 19 percent increase in first quarter revenues, driven by growth in most of its business segments.
For the first three months of 2022, the Waltham, Massachusetts-based company booked $11.82 billion in revenues, up from $9.91 billion in Q1 of 2021 and handily beating the average Wall Street estimate of $10.63 billion.
Organic revenues increased 3 percent, acquisitions increased revenues by 18 percent, and currency translation effects decreased revenues by 2 percent. The firm saw 16 percent organic growth from its core business in the quarter, while COVID-19 testing revenues totaled $1.68 billion.
During a conference call to discuss the financial results, Marc Casper, Thermo Fisher's CEO, chairman, and president, acknowledged that "much has changed" since the beginning of the year – pointing out the war in Ukraine, rising inflation, and COVID-19-related lockdowns in China – but said that those events have not affected Thermo Fisher's performance so far.
According to CFO and Senior VP Stephen Williamson, COVID-19 testing revenues were significantly lower in Q1 than in the prior-year quarter, but they affected the company's four business segments differently.
Revenues in the life sciences solutions segment inched up 1 percent in Q1 to $4.23 billion from $4.20 billion a year ago, while organic revenues decreased 1 percent. Very strong growth in the bioproduction and biosciences businesses was offset by lower revenue in the genetic science business due to lower testing sales, Williamson said.
Analytical instruments revenues grew 9 percent, or 12 percent organically, to $1.52 billion from $1.39 billion. This growth was fueled by the electron microscopy, chromatography, and mass spectrometry businesses.
Specialty diagnostics revenues fell 9 percent, or 7 percent organically, to $1.48 billion from $1.62 billion. The firm saw strong growth in its healthcare market channel, transplant diagnostics, and clinical diagnostics businesses but lower COVID-19 testing revenues than a year ago.
Laboratory products and biopharma services revenues jumped 51 percent, or 6 percent organically, to $5.44 billion from $3.60 billion a year ago, with strong growth in the research and safety market channel and the laboratory products businesses. Williamson pointed out that PPD, Thermo's clinical research business, performed "very well" during the quarter and grew faster than the average core business, contributing $1.66 billion to the segment.
Thermo Fisher's net income for Q1 totaled $2.22 billion, or $5.61 per share, compared to $2.34 billion, or $5.88 per share, in the year-ago quarter. Adjusted EPS was $7.25, beating analyst's consensus estimate of $6.18.
The firm's R&D expenses rose 14 percent in Q1 to $364 million from $320 million in Q1 of 2021, and SG&A costs increased 18 percent to $1.81 billion from $1.54 billion a year ago.
Thermo Fisher ended the quarter with $2.75 billion in cash and cash equivalents.
Following the strong first-quarter results, the company upped its guidance for 2022. It now expects $42.45 billion in revenues for the year, an increase of $450 million overs its previous guidance. This represents 8 percent revenue growth over 2021, and 9 percent core organic growth. The firm anticipates EPS of $22.65 in 2022, which is 22 cents above its prior guidance.
"This guidance factors in our excellent Q1, includes a very strong core business outlook for the remainder of the year, and incorporates the expected impact of the recent macroeconomic dynamics," Casper said.
In morning trading on the New York Stock Exchange, Thermo Fisher's shares were up 8 percent at $561.69.