This article has been updated with information from Thermo Fisher's earnings call.
NEW YORK – Thermo Fisher Scientific reported on Wednesday morning a 36 percent year-over-year rise in third quarter revenues, driven by COVID-19-related sales.
"We further accelerated our exceptional growth momentum in the third quarter," said Marc Casper, the firm's president, chairman, and CEO, in a statement. "Our teams executed very well to build our leadership in supporting the global pandemic response and also capture opportunities to grow our base business."
For the quarter ended Sept. 26, the Waltham, Massachusetts-based company reported $8.52 billion in revenues, up from $6.27 billion in Q3 2019 and beating the consensus analyst estimate of $7.65 billion. Organic revenue grew 34 percent, beating the firm's previous estimate of 24 percent, and currency effects and acquisitions each increased revenue by 1 percent.
About $2.0 billion of revenues, or 23 percent, came from COVID-19-related products and services. In addition, the firm's base business returned to growth in Q3.
"Clearly, we're on track to achieve a truly spectacular year," Casper said during a conference call to discuss the financial results.
During the quarter, Thermo Fisher launched the Amplitude Solution to automate high-throughput PCR testing and added capacity for viral transport media production in Europe. It also launched two new COVID-19 antibody tests in the US and Europe.
In addition, the company partnered with the Economic Development Board of Singapore to build its first pharma services facility in the country. It also opened a new bioproduction facility for manufacturing single-use technologies at its center of excellence in Suzhou, China.
Also in Q3, Thermo Fisher donated more than $25 million of COVID-19 diagnostic test kits, instruments, supplies, and technical assistance to historically Black colleges and universities and established a $20 million Foundation for Science to support STEM education in underserved communities.
Revenues in the life sciences solutions business segment grew 101 percent in Q3 to $3.42 billion from $1.70 billion a year ago, and 100 percent organically. The company saw "exceptional strong growth" in its genetic sciences and biosciences businesses, as well as "very strong growth" in its bioproduction business, SVP and CFO Stephen Williamson said during the conference call.
Analytical instruments revenues were down 2 percent to $1.34 billion from $1.36 billion last year, and 3 percent organically. However, Williamson said, revenues increased 20 percent sequentially and the chromatography and mass spec business returned to growth during the quarter.
Specialty diagnostics revenues soared 63 percent to $1.43 million compared to $880 million a year ago, and 62 percent organically. The increase was driven by COVID-19 response revenue that led to "very strong growth" in the microbiology, healthcare market channel, and clinical diagnostics businesses, he said. Routine diagnostic testing continues to be impacted by the pandemic, though, he added, which affected the company's immunodiagnostics and transplant diagnostics businesses the most, despite a "substantial pickup in activity" from Q2.
Laboratory products and services revenues increased 19 percent to $3.11 billion from $2.62 billion last year, and 16 percent organically. The company saw strong growth in the research and safety market channel, biopharma services, and laboratory products businesses, Williamson said.
Thermo Fisher reported a net income of $1.93 billion, or $4.84 per share, compared to $760 million, or $1.89 per share, for the year-ago quarter. Adjusted EPS for the quarter was $5.63, up from $2.94 in Q3 last year and beat the consensus analyst EPS estimate of $4.31.
R&D expenses increased 20 percent year over year to $296 million from $247 million last year, and SG&A expenses grew 6 percent to $1.30 billion from $1.23 billion a year ago.
For Q4, Thermo Fisher expects organic revenue growth of 29 percent, driven by an expected $1.75 billion in COVID-19 response revenue. Its base business is expected to growth in the low- to mid-single digits. Williamson said that depending on how the pandemic evolves, growth could be higher or lower, and that Thermo Fisher has the capacity to support customer demand going beyond the predicted level of growth. Adjusted EPS is expected to grow 60 percent year over year in Q4. He noted that the Q4 guidance does not anticipate a return to the economic lockdown that happened earlier in the year.
For full-year 2020, Thermo Fisher expects 20 percent year-over-year growth in revenues to $30.52 billion, or 19 percent organic growth. Adjusted EPS is anticipated to grow 48 percent year over year, to $18.27.
As of Sept. 26, the company had $7.54 billion in cash and cash equivalents.
In mid-morning trading on the New York Stock Exchange, Thermo Fisher's shares were up 3 percent at $477.82.