Thermo Fisher Scientific (ticker: TMO), a leading maker of scientific instruments, has revised its forecasts for earnings and sales due to a challenging economic environment. This has resulted in a drop in the company’s stock on Wednesday.
Diminished Expectations
Thermo Fisher now predicts its full-year adjusted earnings to be in the range of $22.28 to $22.72 per share, down from its earlier projection of $23.70. Similarly, the company has reduced its anticipated revenue for 2023 to be between $43.4 billion and $44 billion, compared to the previously forecasted $45.3 billion.
“The magnitude of the EPS and FY’23 guide down definitely surprised us. We expect the stock to be down today,” expresses RBC Capital Markets analyst Conor McNamara in a research note. He rates the stock as Outperform with a $662 price target.
Disappointing Performance
Apart from the dimmer outlook, Thermo Fisher reported second-quarter adjusted earnings of $5.15 per share. This missed not just the Wall Street estimate of $5.43 per share but also fell short of last year’s result of $5.51 per share. Furthermore, the company’s revenue for the quarter stood at $10.7 billion, falling behind analysts’ expectations of matching last year’s figure of $11 billion.
Challenging Economic Climate
Chief Executive Marc Casper states, “The macroeconomic environment became more challenging in the second quarter. Economic activity in China slowed, and across the economy more broadly, businesses became more cautious in their spend,” explaining the reasons behind the lackluster performance.
Stock Performance
Thermo Fisher’s stock saw a decline of 1.2% to $564 shortly after opening, resulting in a year-to-date increase of 2.4%.