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Thermo Fisher Scientific Reports Flat Q3 Revenues, Voices Optimism for 2025, China Business

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NEW YORK – Thermo Fisher Scientific on Wednesday reported essentially flat revenues for the third quarter, which narrowly missed investors’ expectations, but projected organic revenue growth for Q4.

For the three months ended Sept. 28, the Waltham, Massachusetts-based company booked revenues of $10.60 billion versus $10.57 billion a year ago, below the average Wall Street estimate of $10.64 billion. Organic and core organic revenues were also flat compared to the prior-year quarter. Pandemic-related revenues were approximately $100 million, largely from vaccines and therapies, according to Thermo Fisher CFO and Senior VP Stephen Williamson.

By business segment, revenues from life sciences solutions dipped 2 percent, or 4 percent organically, to $2.39 billion from $2.43 billion in the same period last year. The decline was driven by shrinking pandemic-related revenues, Williamson noted.

Revenues from analytical instruments rose 3 percent to $1.81 billion from $1.75 billion in the year-ago quarter. Organic growth for the segment was also 3 percent, driven by the electron microscopy business, Williamson said.

Laboratory products and biopharma services revenues were $5.74 billion, essentially flat compared to $5.72 billion in Q3 2023. Growth in this segment was driven by the research and safety market channel, offset by declining vaccines and therapies revenues.

Revenues from specialty diagnostics rose 5 percent, or 4 percent organically, year over year to $1.13 billion from $1.08 billion, led by the healthcare market channel and transplant diagnostics businesses.

During the quarter, Thermo Fisher achieved a claim extension for the Optilite Freelite Mx Kappa Kit produced by its subsidiary Binding Site under the European Union's In Vitro Diagnostic Regulation (IVDR). The extension allows the assay to aid in the diagnosis of neurological diseases, such as multiple sclerosis, beyond its original indication for multiple myeloma diagnostics and monitoring.

By geography, Q3 organic revenues declined in the "low single digits" in North America while staying flat in Europe and Asia-Pacific, which includes China, Williamson noted.

For the full year, the company anticipates the midpoint of its revenue guidance – $42.4 billion to $43.3 billion – to be the "most likely" outcome, Williamson said. Implied in that midpoint, he added, is around $11.3 billion in Q4 revenues, amounting to 2.5 percent organic revenue growth.

"I'm really quite excited by the fact that we are expecting the fourth quarter to return to growth organically," Thermo Fisher Chairman, President, and CEO Marc Casper told investors during a call recapping the company's Q3 financial results. The company last reported organic revenue growth in July 2022.

"I'm excited for 2025," Casper said. 2025 “is the final year of the runoff of the pandemic-related activity, and while that will still be a headwind to growth, it's going to be less than it was in 2024."

Besides the anticipated revenue growth, Casper also expressed optimism regarding the Chinese market, which he said has been "incredibly muted" in recent quarters, drawing from his recent visit to the country in August where he met with government officials and customers. Recent stimulus programs initiated by the Chinese government have resulted in "optimism and enthusiasm" from Chinese customers, he added.

Specifically, China’s scientific equipment stimulus and loan program for the country's biomedical institutes and researchers are expected to have a positive impact on the company and the wider biotech industry in 2025 and beyond, he said.

More recently, the Chinese government announced another stimulus program to help spur economic growth and business confidence, Casper said. While the details of that program are still unclear, he believes it "would also be helpful for [the market] in the longer term."

Casper said he "came away from the visit seeing firsthand how well positioned" Thermo Fisher is in China, and as the country's economy improves, he expects the firm to capitalize on this.

Thermo Fisher’s Q3 net income rose to $1.63 billion, or $4.25 per share, from $1.72 billion, or $4.42 per share, a year ago. On an adjusted basis, EPS was $5.28 for the quarter, slightly surpassing the Wall Street estimate of $5.24.

The company's R&D costs increased 8 percent to $346.0 million, from $319.0 million a year ago. SG&A expenses were up 10 percent year over year to $1.74 billion from $1.58 billion in Q3 2023.

Thermo Fisher ended the quarter with $4.65 billion in cash and cash equivalents and $2.00 billion in short-term investments.

In light of the Q3 results, the firm raised the lower bound of its full-year adjusted EPS guidance, predicting a new range of $21.35 to $22.07 versus its previous guidance of $21.29 to $22.07.

The company continues to expect full-year core organic revenue growth in the range of -1 percent to 1 percent.

In afternoon trading on the New York Stock Exchange, Thermo Fisher’s shares were down almost 3 percent at $571.17.