This article has been updated to add information from Thermo Fisher Scientific's earnings conference call.
NEW YORK – Thermo Fisher Scientific reported before the opening of the market on Thursday that its first quarter revenues rose 59 percent year over year, thanks largely to its life sciences solutions and specialty diagnostics business segments.
For the three months ended April 3, 2021, the Waltham, Massachusetts-based company reported total revenues of $9.91 billion, up from $6.23 billion a year ago and beating the average Wall Street analyst estimate of $9.72 billion. Organic revenues grew 53 percent, while acquisitions increased revenue by 2 percent and currency translation increased revenue by 4 percent, Thermo Fisher said.
Revenues from the life sciences solutions business unit rose 137 percent to $4.20 billion in Q1 2021 from $1.77 billion in Q1 2020, and revenues from the specialty diagnostics segment grew 69 percent to $1.62 billion from $958 million. Meanwhile, revenues from the analytical instruments segment rose 26 percent to $1.39 billion from $1.10 billion in the year-ago quarter, and revenues from the laboratory products and services segment rose 32 percent to $3.60 billion from $2.73 billion.
"We are off to an excellent start to the year. From a financial perspective, we again delivered exceptional growth in revenue, earnings, and free cash flow for the quarter," Marc Casper, Thermo Fisher's chairman, president, and CEO, said in a statement. "We began accelerating our investments in talent, capabilities, and capacity in the second half of 2020, and we are already starting to see the benefits of those actions which will ensure an even brighter future for our company."
Casper highlighted the company's recent decision to acquire contract research organization PPD for $17.4 billion, calling it a great fit for Thermo Fisher that will "strengthen our value proposition for our largest and fastest growing end market."
On a conference call with analysts following the release of the earnings, Casper said the company's Q1 growth was driven primarily by strength in its end markets. Thermo Fisher saw growth across all businesses serving pharmaceutical and biotech customers, including bio production, pharma services, bio sciences, chromatography, and mass spectrometry, as well as in its research and safety market channel, he said. In the academic government market, the company saw 20 percent growth, driven by robust customer activity globally. In the industrial and applied market, the company grew in the low double digits in Q1.
Thermo Fisher's Q1 net income rose to $2.34 billion, or $5.88 per share, from $788 million, or $1.97 per share, a year ago. On an adjusted basis, the company reported EPS of $7.21 per share for the quarter, beating the average Wall Street estimate of $6.65 per share.
The company's R&D costs rose 31 percent to $320 million from $245 million a year ago, while its SG&A expenses rose 23 percent to $1.54 billion from $1.25 billion.
Thermo Fisher ended the quarter with cash and cash equivalents of $5.58 billion.
On the conference call, Casper said that based on its performance in the first quarter and its confidence in how it can perform for the rest of the year, Thermo Fisher is raising its revenue guidance for 2021 by $550 million and raising its earnings guidance for the year by $.35 per share. The company is now expecting revenues of $35.6 billion, a 10 percent increase over its 2020 revenues, and adjusted EPS of $21.97 per share. Analysts are expecting revenues of $35.5 billion for the year and earnings of $22 per share.
Thermo Fisher CFO Stephen Williamson said the guidance raise was driven by an improved organic growth outlook for the base business; the higher impact of acquisition reflecting the acquisition in January of Mesa Biotech, which was not included in the firm's initial guidance; and a good start to the year for Thermo Fisher's European viral vector business.
He also noted that the company is now assuming it will deliver $7.3 billion of COVID-19 response revenues in 2021, which includes vaccine and therapy related revenues of approximately $1.5 billion. This is $500 million higher than initial guidance assumptions, reflecting strong customer demand and progress with the company's capacity expansion project.
The company's shares were down nearly 5 percent to $463.80 in afternoon trading on the New York Stock Exchange.