This story has been updated to include information from Thermo Fisher's Q2 2024 earnings call.
NEW YORK – Thermo Fisher Scientific on Wednesday reported a 1 percent year-over-year decline in its second quarter revenues.
It beat the consensus Wall Street estimate, nonetheless, and prompted the firm to raise the low end of its full-year 2024 revenue guidance.
"We had great results for the quarter," Marc Casper, Thermo Fisher's CEO, chairman, and president, told investors in a conference call recapping the company’s Q2 results. "We are making excellent progress to deliver differentiated results for the year."
For the three months ended June 29, the Waltham, Massachusetts-based company reported that revenues retreated to $10.54 billion from $10.69 billion. It beat the average analysts' estimate of $10.51 billion.
According to CFO and Senior VP Stephen Williamson, the Q2 revenue decline was a result of 1 percent lower organic revenues year-over-year and foreign exchange impacts, offset by a slight contribution from acquisitions.
The company’s core organic revenue growth was flat compared to the prior-year period, and pandemic-related revenue was approximately $115.0 million, mainly from vaccines and therapies, Williamson said.
By business segment, Thermo Fisher’s life sciences solutions revenues for Q2 declined 4 percent, or 3 percent organically, to $2.36 billion from $2.46 billion in Q2 2023. The growth in this segment was led by the company’s biosciences business which was more than offset by the declining pandemic revenues, Williamson noted.
Revenues from the specialty diagnostics segment were $1.12 billion compared to $1.11 billion in the year-ago period. Both the reported and organic revenues for the segment were 1 percent higher than the prior-year quarter, led by growth in the company’s transplant diagnostics and immune diagnostics businesses.
In the analytical instruments segment, revenues rose 2 percent to $1.78 billion from $1.75 billion in Q2 2023, representing 3 percent organic growth year over year. The growth in the segment was led by the company’s electron microscopy business.
Lastly, revenues from laboratory products and biopharma services were $5.76 billion, down 1 percent organically from $5.83 billion a year ago. The decline was driven by the runoff of vaccine and therapy revenues, according to Williamson.
Geographically, Williamson said Thermo Fisher’s organic revenue declined mid-single digits in North America, grew low single digits in Europe, and increased mid-single digits in Asia-Pacific, which included mid-single digit growth in China.
Thermo Fisher's Q2 net income was $1.55 billion, or $4.04 per share, compared to net income of $1.36 billion, or $3.51 per share, a year ago. Adjusted EPS for the quarter was $5.37, beating the analysts' average estimate of $5.12 per share.
The company's R&D costs dropped 2 percent in Q2 to $339.0 million from $345.0 million a year ago, and its SG&A expenses increased 1 percent to $1.69 billion from $1.67 billion.
Thermo Fisher ended the quarter with $7.07 billion in cash and cash equivalents and $1.75 billion in short-term investments.
Encouraged by Q2 results, the firm once again raised the low end of its full-year 2024 revenue guidance and now estimates revenues to be between $42.4 billion and $43.3 billion compared to the previously raised range of $42.3 billion to $43.3 billion. It also raised adjusted EPS guidance to between $21.29 and $22.07 compared to the previous range of $21.14 to $22.02.
Despite the improved guidance, Williamson said the company still expects core organic revenue growth to be in the range of minus 1 percent to plus 1 percent for the full year.
In afternoon trading on the Nasdaq, shares of Thermo Fisher were up more than 3 percent to $569.76.