Thermo Fisher’s Strong 2024 Earnings Call Insights

Thermo Fisher Scientific ((TMO)) has held its Q4 earnings call. Read on for the main highlights of the call.

Thermo Fisher Scientific’s recent earnings call revealed a strong end to 2024, with significant revenue and earnings growth, reflecting positive sentiment despite certain challenges. The company’s innovation and strategic capital deployment were highlighted as key drivers of success, along with positive customer feedback. However, declines in the pharma and biotech sectors, along with diagnostics and healthcare segments, and potential policy uncertainties were noted as challenges.

Q4 Revenue and Earnings Growth

The fourth quarter of 2024 saw Thermo Fisher Scientific’s revenue grow by 5% year-over-year, reaching $11.4 billion. Adjusted operating income increased by 7% to $2.72 billion, and adjusted earnings per share (EPS) rose by 8% to $6.10. These figures underscore the company’s strong financial performance in the last quarter of the year.

Strong Performance Across Segments

All end markets experienced positive revenue growth in Q4. The pharma and biotech sectors grew in the mid-single digits, academic and government sectors in the high-single digits, and industrial and applied sectors also in the high-single digits. The diagnostics and healthcare segments saw growth in the low single-digits, indicating a broad-based performance across various segments.

Successful Capital Deployment

In 2024, Thermo Fisher returned $4.6 billion to shareholders through stock buybacks and dividends, including $1 billion in share repurchases during Q4. This demonstrates the company’s commitment to returning value to its shareholders through disciplined capital management.

High-Impact Innovation

The company launched several new products, such as the Thermo Scientific Stellar mass spectrometer and the Thermo Scientific Dionex Inuvion ion chromatography system. These innovations highlight Thermo Fisher’s focus on advancing technology and expanding its product offerings.

Positive Customer Feedback and Partnerships

Thermo Fisher received strong positive feedback from customers regarding its Accelerator Drug Development solution. The company also formed new partnerships, including with the National Cancer Institute and the University of Arkansas for Medical Sciences, reinforcing its collaborative approach to innovation and development.

Pharma and Biotech Full Year Decline

Despite Q4 growth, the pharma and biotech sectors saw a low single-digit decline for the full year, impacted by a mid-single-digit headwind from the runoff of vaccine and therapy-related revenue. This reflects ongoing challenges in these sectors.

Diagnostics and Healthcare Full Year Decline

The diagnostics and healthcare segments also experienced a low single-digit decline for the full year, primarily due to the runoff of COVID-19 testing-related revenue, highlighting the post-pandemic adjustments in these sectors.

Uncertain Policy Environment

Thermo Fisher faces potential impacts from future policy changes, tariffs, NIH funding, and export controls, creating some uncertainty moving forward. This requires the company to remain vigilant and adaptive to policy shifts.

Forward-Looking Guidance

Looking forward to 2025, Thermo Fisher Scientific forecasts revenue between $43.5 billion and $44 billion, indicating a 3% to 4% organic growth. Adjusted EPS is anticipated to rise by 6% to 8%, reaching $23.10 to $23.50. The company expects an adjusted operating margin expansion of 90 basis points, underscoring its optimism about market conditions improving and its strategic initiatives driving continued success.

In summary, Thermo Fisher Scientific’s earnings call presented an optimistic view of its strong 2024 finish, with significant growth across segments and successful innovation efforts. Despite challenges in certain sectors and uncertainties in policy, the company remains focused on leveraging its strategic initiatives and market opportunities to drive further success in 2025.