It has been about a month since the last earnings report for Thermo Fisher Scientific (TMO). Shares have added about 1.8% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Thermo Fisher due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Thermo Fisher Scientific Inc. before we dive into how investors and analysts have reacted as of late.
Thermo Fisher Q2 Earnings & Revenues Beat
Thermo Fisher Scientific Inc.'s (TMO) second-quarter 2025 adjusted earnings per share (EPS) of $5.36 beat the Zacks Consensus Estimate by 2.7%. However, the figure decreased 0.2% year over year.
The adjusted number excludes certain expenses, including asset amortization costs and certain restructuring costs.
GAAP EPS was $4.28, up 6% on a year-over-year basis.
TMO’s Q2 Revenues in Detail
Revenues in the quarter increased 2.9% year over year to $10.85 billion. Moreover, the top line surpassed the Zacks Consensus Estimate by 1.9%.
Organic revenues in the reported quarter increased 2% year over year.
Thermo Fisher’s Segmental Analysis
Thermo Fisher operates under four business segments, as discussed below:
Life Sciences Solutions
Revenues in the Life Sciences Solutions segment (23% of total revenues) increased 6.1% year over year to $2.50 billion. The number surpassed our model’s estimate of $2.37 billion.
Analytical Instruments
Revenues in this segment (15.9%) declined 3% year over year to $1.73 billion. The figure missed our model’s estimate of $1.84 billion.
Specialty Diagnostics
Revenues in the Specialty Diagnostics segment (10.4%) increased 1.5% year over year to $1.13 billion. The number missed our model’s prediction of $1.15 billion.
Laboratory Products and Biopharma Services
Revenues in this segment (55.2%) rose 4.1% year over year to $5.99 billion. Our model’s estimate was $5.71 billion.
TMO’s Margin Performance
Gross margin of 41.2% in the second quarter contracted 83 basis points (bps) year over year due to a 4.4% increase in the cost of revenues.
In the quarter, selling, general and administrative expenses rose 5.4% to $1.78 billion. Research and development expenses increased 3.8% to $352 million.
The adjusted operating margin in the quarter was 21.6%, reflecting a contraction of 124 bps.
TMO’s Financial Position
The company ended the second quarter of 2025 with cash and cash equivalents and short-term investments of $6.39 billion compared with $5.95 billion at the end of the first quarter of 2025.
Cumulative net cash from operating activities at the end of the second quarter was $2.12 billion compared with $3.21 billion a year ago.
Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth of 14.86%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Thermo Fisher has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Thermo Fisher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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