Thermo Fisher's Q1 Earnings Top Estimates, Revenues Beat, Stock Up

Thermo Fisher Scientific Inc.'s TMO first-quarter 2025 adjusted earnings per share (EPS) of $5.15 beat the Zacks Consensus Estimate by 1%. The figure increased 0.8% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The adjusted number excludes certain expenses, including asset amortization costs and certain restructuring costs.

GAAP EPS was $3.98, up 15% on a year-over-year basis.

Following the earnings announcement, shares of TMO rose a modest 1.7% in pre-market trading today.

TMO’s Q1 Revenues in Detail

Revenues in the quarter increased 0.2% year over year to $10.36 billion. Moreover, the top line surpassed the Zacks Consensus Estimate by 1.1%.

Organic revenues in the reported quarter increased 1% 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 (22.6% of total revenues) increased 2.4% year over year to $2.34 billion. The number surpassed our model’s estimate of $2.16 billion.

Analytical Instruments

Revenues in this segment (16.6%) rose 1.8% year over year to $1.72 billion. The figure missed our model’s estimate of $1.78 billion.

Specialty Diagnostics

Revenues in the Specialty Diagnostics segment (11.1%) increased 3.5% year over year to $1.15 billion. The number surpassed our model’s prediction of $1.09 billion.

Laboratory Products and Biopharma Services

Revenues in this segment (54.4%) fell 1.4% year over year to $5.64 billion. Our model’s estimate was $5.65 billion.

TMO’s Margin Performance

Gross margin of 41.6% in the first quarter contracted 5 basis points (bps) year over year, due to a 0.3% increase in the cost of revenues.

In the quarter, selling, general and administrative expenses fell 0.6% to $1.72 billion. Research and development expenses increased 3.3% to $342 million.

The adjusted operating margin in the quarter was 21.7%, reflecting a contraction of 2 bps.

TMO’s Financial Position

The company ended the first quarter of 2025 with cash and cash equivalents and short-term investments of $5.95 billion compared with $5.57 billion at the end of the fourth quarter of 2024.

Net cash from operating activities at the end of the first quarter was $723 million compared with $1.25 billion a year ago.

Thermo Fisher has a consistent dividend-paying history, with the five-year annualized dividend growth of 15.10%.

Thermo Fisher Scientific Inc. Price, Consensus and EPS Surprise

Thermo Fisher Scientific Inc. price-consensus-eps-surprise-chart | Thermo Fisher Scientific Inc. Quote

Our Take on Thermo Fisher Stock

Thermo Fisher exited the first quarter of 2025 with better-than-expected results, wherein both earnings and revenues beat the respective estimates. Barring the Laboratory Products and Biopharma Services segment, all other business segments reported growth during the quarter. However, contraction of both margins in the quarter was discouraging. The company will provide its 2025 guidance on the earnings call today.

During the first quarter, the company advanced in its growth strategy by launching a range of high-impact, innovative new products, which include the Thermo Scientific Vulcan Automated Lab and Olink Reveal proteomics kits. Also launched a new line of floor model centrifuges - Thermo Scientific Cryofuge, Thermo Scientific BIOS and Thermo Scientific LYNX. In addition, Thermo Fisher inked an agreement to acquire Solventum’s Purification & Filtration Business for $4.1 billion in cash. All these developments translated into meaningful commercial wins for the company in the first quarter, which is encouraging.

TMO’s Zacks Rank and Key Picks

Thermo Fisher currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Veeva Systems VEEV and Masimo MASI. 

AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a loss of 13 cents.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Revenues of $72 million beat the Zacks Consensus Estimate by 2%. ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5%. The company beat on earnings in each of the trailing four quarters, the average surprise being 70.9%.

Veeva Systems, sporting a Zacks Rank #1 at present, posted fourth-quarter fiscal 2025 adjusted EPS of $1.75, which exceeded the Zacks Consensus Estimate by 10.1%. Revenues of $720.9 million surpassed the Zacks Consensus Estimate by 3.2%.

VEEV has an estimated long-term earnings growth rate of 26.6% compared with the industry’s 20.8%. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.9%.

Masimo, currently sporting a Zacks Rank #1, reported a fourth-quarter 2024 adjusted EPS of $1.80, which surpassed the Zacks Consensus Estimate by 20.8%. Revenues of $600.7 million topped the Zacks Consensus Estimate by 0.8%.

MASI has an estimated earnings yield of 3.5% for fiscal 2025 compared with the industry’s 3.6%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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