NEW YORK – Thermo Fisher Scientific said Wednesday morning that it is slightly raising its full-year 2024 revenue guidance in light of favorable Q1 financial results.
The company now estimates 2024 revenues to be between $42.3 billion and $43.3 billion, compared to the previous range of $42.1 billion to $43.3 billion. It also raised adjusted EPS guidance to between $21.14 and $22.02 from a previous range of $20.95 to $22.
"We had a great start to the year, we delivered another quarter of strong financial performance," Marc Casper, Thermo Fisher's CEO, chairman, and president, told investors in a conference call recapping the company’s Q1 results. "Our performance in the first quarter is allowing us to raise our guidance and sets us up to deliver differentiated performance in 2024."
For the quarter ended March 30, the Waltham, Massachusetts-based company booked $10.34 billion in revenues, down 3 percent from $10.71 billion in the same quarter last year, beating the average Wall Street estimate of $10.17 billion.
According to CFO and Senior VP Stephen Williamson, Q1 core organic revenues decreased by 3 percent year over year, and pandemic-related revenues during the quarter were approximately $200 million, including $175 million related to vaccines and therapies.
By geography, Thermo Fisher’s Q1 organic revenues in North America declined by mid-single digits, revenues in Europe declined by low single digits, while revenues in Asia-Pacific and China declined in the low single digits, Williamson said.
Looking at business segments, Q1 revenues in life sciences solutions dropped 12 percent to $2.29 billion from last year’s $2.61 billion. Organic revenues in this sector also declined 12 percent compared to the same period last year, Williamson said, driven by lower pandemic-related revenues as well as lower levels of customer activities.
Analytical instruments revenues dipped 2 percent, or 1 percent organically, to $1.69 billion from $1.72 billion. The company continued to "deliver very strong growth in the electron microscopy business," Williamson told investors.
Specialty diagnostics revenues stayed flat at $1.11 billion. During the quarter, the company saw strong underlying growth in this segment, led by the transplant diagnostics and immunodiagnostics businesses.
Both reported and organic revenues from the laboratory products and biopharma services segment saw a 1 percent decrease to $5.72 billion from $5.76 billion a year ago. This decline was driven by decreased demand for CVOID vaccines and therapies, Williamson noted.
Thermo Fisher's net income for Q1 totaled $1.33 billion, or $3.46 per share, compared to net income of $1.29 billion, or $3.32 per share, in the year-ago quarter. Adjusted EPS was $5.11 for the quarter, above the analyst consensus estimate of $4.71.
The firm's R&D expenses declined 4 percent in Q1 to $331.0 million from $346.0 million in Q1 2023, while SG&A costs rose 5 percent to $1.73 billion from $1.65 billion a year ago.
Thermo Fisher ended the quarter with $5.5 billion in cash and cash equivalents and $1.75 billion in short-term investments.
Williamson said the company continues to assume that core organic revenues will shrink up to 1 percent or grow up to 1 percent in 2024. At the midpoint, core organic revenue growth would be just under $100 million, he added.
During the call, Casper reiterated that the company expects to see "a modest pickup in economic activity as the year progresses." It has already observed a few positive developments in end markets that support that view, he added, including continued improvement in the biotech funding environment and a stimulus program announced by China.
Casper also highlighted the company’s recent efforts to actively utilize generative AI to help increase operating efficiency and productivity, as well as to improve customer experience across the company.
Specifically, he said the firm is using generative AI to help "accelerate software development timelines" in its analytical instruments and life science solutions businesses. Additionally, Thermo Fisher is levering AI to "enhance the capability of our technical and customer service teams to more effectively serve our customers," he noted.
In morning trading on the New York Stock Exchange, Thermo Fisher's shares were up a fraction of a percent at $579.60.