• Q4 Revenue: $11.4 billion, a 5% year-over-year increase.
• Q4 Adjusted Operating Income: $2.72 billion, a 7% increase.
• Q4 Adjusted Operating Margin: 23.9%, an expansion of 50 basis points.
• Q4 Adjusted EPS: $6.10, an 8% increase.
• Full-Year 2024 Revenue: $42.9 billion.
• Full-Year 2024 Adjusted Operating Income: $9.71 billion.
• Full-Year 2024 Adjusted EPS: $21.86 per share.
• Full-Year Free Cash Flow: $7.3 billion.
• 2024 Capital Return to Shareholders: $4.6 billion through stock buybacks and dividends.
• 2025 Revenue Guidance: $43.5 billion to $44 billion, with 3% to 4% organic growth.
• 2025 Adjusted EPS Guidance: $23.10 to $23.50, representing 6% to 8% growth.

• Warning! GuruFocus has detected 7 Warning Sign with TMO.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Thermo Fisher Scientific Inc (NYSE:TMO) reported strong revenue growth of 5% year over year in Q4, reaching $11.4 billion.
• The company achieved an 8% increase in adjusted EPS for Q4, reaching $6.10 per share.
• Thermo Fisher Scientific Inc (NYSE:TMO) expanded its adjusted operating margins by 50 basis points to 23.9% in Q4.
• The company launched several innovative products in 2024, including the Thermo Scientific Stellar mass spectrometer and the Thermo Scientific Iliad Scanning Transmission Electron Microscope.
• Thermo Fisher Scientific Inc (NYSE:TMO) returned $4.6 billion of capital to shareholders in 2024 through stock buybacks and dividends.

Negative Points

• The pharma and biotech segment experienced 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.
• Diagnostics and healthcare declined in low single digits for the full year, affected by the runoff of COVID-19 testing-related revenue.
• The Laboratory Products and Biopharma Services segment saw an 8% decline in adjusted operating income for the full year.
• The company faces a 1% headwind from the remaining runoff of pandemic-related revenue in its 2025 guidance.
• Thermo Fisher Scientific Inc (NYSE:TMO) anticipates a 1.5% revenue headwind from foreign exchange in 2025.

Q & A Highlights

Q: Can you expand on the modest policy changes built into the 2025 guidance and the methodology behind it? A: Marc Casper, Chairman, President, and CEO, explained that the guidance assumes market conditions will strengthen throughout the year. The company is focused on delivering strong EPS growth despite uncertainties. Policy changes are managed within reason, and the business environment, particularly in the US, is expected to be more business-friendly. The company is prepared to navigate any policy changes that may arise.

Q: How is Thermo Fisher achieving 90 basis points of operating margin expansion in 2025 despite a subdued top-line environment? A: Stephen Williamson, CFO, stated that the expansion is driven by strong volume pull-through and effective cost management using the PPI Business System. The company has taken cost actions over the past couple of years, and as volumes return to normal, they are ensuring high pull-through on incremental revenue.

Q: What impact do you expect from NIH funding changes on the academic and government market? A: Marc Casper noted that it's too early to assess the impact of potential policy changes. The company assumes academic and government growth will be around the company average, with half of this market in the US and half globally. The fourth quarter saw strong performance in this segment, indicating resilience.

Q: What drove the strong performance in the Analytical Instruments segment in Q4, and what are the expectations for 2025? A: Marc Casper attributed the strong performance to a steady stream of innovation, particularly in electromicroscopy and chromatography and mass spectrometry. The company saw some benefit from China stimulus in Q4, and orders were strong, setting up positive momentum for 2025.

Q: How is the Accelerator Drug Development program progressing, and what impact is it having? A: Marc Casper highlighted that the program is gaining traction, with strong customer interest and authorizations. It allows customers to leverage Thermo Fisher's expertise to improve R&D returns. The program is seeing faster adoption in biotech, with large pharma also showing interest, setting up for accelerated growth in 2026 and beyond.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.