On the heels of a blockbuster 2022, in which it eked out 15% revenue growth despite dramatically dropping demand for COVID-19 tests, Thermo Fisher Scientific took a much more conservative approach to its 2023 outlook, predicting year-over-year growth of less than 1%.
It appears that the company was right to temper its expectations, as it’s progressively lowered those predictions as the year has gone on. Now, according to Wednesday’s third-quarter earnings report, Thermo Fisher is expecting 2023 revenues to slide in nearly 5% below last year’s $44.92 billion take.
The full-year outlook now stands at $42.7 billion, about $1 billion less than the previous quarter’s forecasts, which placed revenues between $43.4 billion and $44 billion—a range that was in turn another billion-plus below the year’s original prediction of $45.3 billion.
During a call with investors regarding the quarterly results, Stephen Williamson, the company’s chief financial officer, attributed the reduced forecast to an increased headwind from foreign exchange rates, as well as lower core revenues.
The quarter’s own revenues also saw a slight dip: They clocked in at $10.57 billion, about 1% lower than the third quarter of 2022. The total took a hit from still-slipping COVID-19 testing revenues but was somewhat buoyed by Thermo Fisher’s recent acquisitions and a positive impact from currency translation.
However, core organic revenues—which exclude earnings from COVID diagnostics and from acquisitions—grew by 1%, a number that Thermo Fisher is planning to recreate in its full-year report.
The company’s COVID tests brought in just $50 million for the quarter, a year-over-year drop of 4%. Its acquisitions, meanwhile, boosted revenues by 1%; Thermo Fisher’s recent additions include the $912.5 million purchase of real-world data intelligence company CorEvitas, which closed in August, and the proposed $3.1 billion buyout of proteomics analysis tech maker Olink, which was announced this month, shortly after the third quarter’s close.
Upon the announcement of the quarter’s falling revenues and Thermo Fisher’s shrinking full-year outlook, the company’s stock took a sharp downturn, dropping to its lowest levels in over three years.
Wednesday morning, following the release of the earnings report, the stock price plummeted nearly 8% when the market opened, from a closing price of more than $458 on Tuesday down to about $422 the next morning. In the ensuing hours, the stock reached a low of around $415—a level it hasn’t hit since the late summer of 2020.
As of Thursday, the stock price was steadily creeping back upwards, opening at just over $431 and on track to reach $445 by midday.