By Sahil Pandey and Puyaan Singh
April 23 (Reuters) – Thermo Fisher Scientific on Thursday reported better-than-expected quarterly results, as growth in its laboratory products and biopharma services business helped offset softness in analytical instruments and specialty diagnostics.
Shares slumped more than 5% premarket following the results, which a few analysts linked to underperformance of some segments.
First-quarter revenue from analytical instruments was flat at $1.72 billion.
Specialty diagnostics, which sells test kits, saw revenue dip by about 0.5% to $1.14 billion. Analysts at Leerink Partners and Evercore ISI attributed it to a lighter flu season, as seen among peers in respiratory diagnostics.
TD Cowen analyst Dan Brennan said Thermo Fisher’s core sales growth, which was in line with Wall Street rather than topping expectations as it has in recent quarters, could also be weighing on the stock.
Life-sciences tools and services companies have been contending with cautious post-pandemic funding for smaller biotechs, weak academic research funding even as demand linked to pharmaceutical research and manufacturing has shown signs of stabilization.
The Trump administration has been slashing funding and freezing grants for universities and research bodies to which Thermo provides its products and services.
The underperformance of Thermo Fisher’s segments raise questions on the timing of recovery across the end-markets, Leerink’s Puneet Souda told Reuters.
The Waltham, Massachusetts-based company posted quarterly revenue of $11.01 billion, above analysts’ estimate of $10.85 billion, according to LSEG data. Revenue rose 6% from a year earlier.
Revenue from its largest segment, laboratory products and biopharma services, rose about 7% to $6.04 billion in the quarter, from $5.64 billion a year earlier.
Industry peer Danaher topped first-quarter profit expectations earlier this week, helped by strong demand for its bioprocessing tools used in drug manufacturing.
Thermo Fisher reported adjusted earnings per share of $5.44 for the quarter ended March 28, compared with analysts’ estimate of $5.24.
(Reporting by Sahil Pandey and Puyaan Singh in Bengaluru; Editing by Shailesh Kuber)
