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03 February 2021

Thermo Fisher Earnings Beat Estimates Again

Thermo Fisher, the global provider of scientific instrumentation and laboratory equipment, continued its long-standing tradition of beating earnings estimates, helping to send its stock back up to near record highs after shares took a breather from its significant outperformance in 2020. The firm recorded revenues of US$10.55bn in the fourth quarter of 2021, up 54% year-on-year as sales of its COVID-19 testing kits and laboratory equipment used by vaccine manufacturers produced record demand for its products and services.

Profit also saw a significant increase as adjusted earnings per share rose by 100% to US$7.09, significantly higher than expectations of US$6.56 projected by industry analysts. The figures show that the company is able to adapt quickly to the changing circumstances of the Coronavirus pandemic, maximising fulfilment of demand while ensuring costs are controlled in a sensible manner.

The very nature of Thermo Fisher’s products and services, as well as the end markets in which it sells into, have a positive impact on top and bottom line visibility into the long-term. With the majority of its products essential to saving lives and improving people’s quality of life, coupled with strong end customers such as governments and pharmaceutical companies, the firm has produced consistent growth throughout different market cycles. This level of visibility and consistency has been rewarded by shareholders, with the company’s stock up 318% over the past five years.

While the laboratory equipment sector has gained a significant boost from the COVID-19 pandemic, producing strong results at Thermo Fisher and its competitors, into the medium-term especially it will be interesting to see if Thermo Fisher can continue its growth after the global pandemic is over. Long-term, this is unlikely to be a problem but when the company’s COVID-19 products and services are no longer required, the demand drop off for certain segments of its business may impact its overall finances, even for just a short period of time.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
 
Thermo Fisher Earnings Beat Estimates Again
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