Thermo Fisher Scientific Inc. (TMO) Earnings & Analysis

Latest quarter

Thermo Fisher reported Q3 FY2026 revenue of $12.1 billion, above the consensus of $11.9 billion and up from $11.1 billion a year earlier. Adjusted earnings per share were $6.68, exceeding the consensus of $6.40; diluted EPS was $4.64, compared with $4.27 a year earlier.

CFO Jim Meyer said quarterly revenue included 6% organic growth and a 4% acquisition contribution, partly offset by a 1% decrease from the microbiology divestiture. He said Laboratory Products and Biopharma Services posted 10% organic growth, while Life Sciences Solutions grew 1% organically. Analytical Instruments grew 6% organically, and Specialty Diagnostics was flat.

The company’s operating margin increased to 18.6% from 17.4% a year earlier. In its filing, Thermo Fisher attributed higher operating margins primarily to productivity improvements, including tariff refunds, partly offset by strategic investments. Free cash flow was $2.1 billion, compared with $1.8 billion a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Marc Casper said the improvement in end-market activity seen in the second quarter continued into the third. Pharma and biotech revenue grew in the high single digits, led by pharma services and the research and safety channel, while academic and government revenue was flat. Casper said industrial and applied revenue also grew in the high single digits, led by electron microscopy and the research and safety channel.

Asked about biotech, Casper said customer confidence and funding had improved. He described a progression from clinical-research activity into laboratory spending, but said demand for bioscience and genetic-science reagents remained muted. He expected biotech customers to spend more on those technologies over the next couple of quarters.

CFO Jim Meyer said third-quarter adjusted EPS was 26 cents ahead of the company’s previous guidance. He attributed 15 cents of that difference to the net effect of tariff refunds, after targeted reinvestment. Meyer said the refunds added approximately $60 million to adjusted operating income and 50 basis points to adjusted operating margin. The reinvestment included accelerated AI deployment, additional support for pharma-services capacity and spending on employees.

When asked about the move from 6% organic growth in the third quarter to the company’s 4% fourth-quarter outlook, Meyer said some pharma-services customer activity had been completed in the third quarter. He said business momentum was offsetting that timing effect in the fourth quarter.

Casper said the Clario integration was proceeding smoothly and that Thermo Fisher was connecting its capabilities to its clinical-development offering. On AI, he said the company had opened a center in South Korea to work with customers on scientific workflows. Asked about quantifying AI’s longer-term effects, Casper said he would address the topic at a future investor day.

Guidance

Thermo Fisher raised its FY2026 revenue outlook to $47.7 billion–$48.2 billion and its adjusted EPS outlook to $25.13–$25.43, from the previous $24.93–$25.33 EPS range. Meyer said the company also raised its full-year organic revenue growth outlook to 4% and its free cash flow outlook to $7.0 billion–$7.5 billion.