Thermo Fisher Scientific Announces $4 Billion Share Repurchase Authorization

Nov 17, 2022 00:01 CST Updated Nov 18, 14:57

Thermo Fisher Scientific

Biotechnology Product Developer

On November 10, 2022, Thermo Fisher Scientific Inc. (NYSE: TMO) announced that the company's board of directors had approved a $4 billion share repurchase.

# 01 Company Announces Share Repurchase

On November 10, 2022, Thermo Fisher Scientific Inc. announced that its board of directors had authorized the repurchase of $4 billion of common stock in open market or negotiated transactions. The authorization has no expiration date. Thermo Fisher's stock price peaked in the summer and then continued to decline, reflecting the overall market conditions.

It is reported that Thermo Fisher Scientific Inc. onceRespectivelyStocks were repurchased and additional investments were made in April 2016, September 2018, April 2022, and other different times.For companies with cash, share repurchase is a way to enhance corporate value.Since Thermo Fisher Scientific announced its share repurchase, its stock price has increased by more than 8%.

# 02 Review of Q3 Performance

During last month's Q3 earnings call, Thermo Fisher Scientific announced it was raising its full-year revenue guidance by $650 million to $43.8 billion, implying 12% growth. The company’s revenue grew 14% in Q3 2022 to $10.68 billion, with organic revenue down 1%.

Status of Each Department

Life Sciences Solutions Business Unit

Revenue from the Life Sciences Solutions segment decreased 20% from $3.72 billion in Q3 2021 to $2.96 billion in Q3 2022, accounting for approximately 39.9% of the revenue across the four segments. The bioproduction business achieved very strong growth. Adjusted operating income for the Life Sciences Solutions segment in Q3 fell by 43%. The adjusted operating margin was 35.1%, a decrease of 14 percentage points year over year.

Analytical Instruments Department

Revenue from the Analytical Instruments segment grew 9% to $1.62 billion from $1.48 billion in the same period last year, accounting for approximately 15.8% of the revenue across the four segments. The strong growth in this segment during the quarter was broad-based.ChromatographyAndMass SpectrometryandElectron MicroscopeBusiness-led. The segment’s adjusted revenue increased 47% in the third quarter, with an adjusted operating margin of 23.8%, up 600 basis points year over year.

Professional Diagnostic Department

Professional Diagnostic DepartmentRevenue from 20Revenue in the third quarter of 2021 decreased by 21% from $1.36 billion to $1.07 billion, accounting for approximately 14.5% of the revenue across all four divisions. The transplantation diagnostics and microbiology businesses achieved strong fundamental growth, which was offset by a year-over-year decline (-14%) in COVID-19 test revenues. Adjusted operating income in the third quarter fell by 29%, with the adjusted operating margin at 21%, down 210 basis points year-over-year.

Laboratory Products and Biopharmaceutical Services Division

Revenue from the Laboratory Products and Biopharma Services segment increased 60% from $3.49 billion to $5.59 billion, accounting for approximately [percentage] of the total revenue across the four segments.37.4%. The newly acquired clinical research business PPD performed well, achieving core organic growth and contributing $1.82 billion in revenue to the division, with an expected revenue of $6.8 billion in 2022. The division's adjusted operating income increased by 89% in the third quarter, with an adjusted operating margin of 13%, which was 200 basis points higher than the third quarter of 2021.

Highlights of the Third Quarter:

Third-quarter revenue was $10.68 billion; core organic revenue growth reached 14%.
COVID-19 Test Revenue was $440 Million.
The company has launched a series of instruments, including the Orbitrap Ascend Tribrid Mass Spectrometer and the Thermo Scientific Arctis Cryo-Plasma Focused Ion Beam automated microscope. It has also advanced its diagnostic products with the CE-IVD certification of the Oncomine Dx Express Test and Oncomine Reporter Dx Software.
Enhanced the construction of two new facilities in Chelmsford, Massachusetts, to expand productivity.
Signs Agreement with Enel North America to Source Energy from Renewable Wind Power, Continuing the Implementation of Emission Reduction Strategy.

# 03 Plan to Acquire IVD Companies

Thermo Fisher Scientific, a major acquirer, has also been actively seeking opportunities for mergers and acquisitions. Last month, the company announced plans to spend $2.6 billion to acquire The Binding Site Group, one of the world’s leading IVD companies in the field of multiple myeloma and immune disorders. The transaction is expected to be completed in the first half of 2023, and The Binding Site will become part of Thermo Fisher's specialty diagnostics division.

About Thermo Fisher Scientific

Thermo Fisher Scientific is a global leader in the scientific services field, with annual revenues of approximately $40 billion and around 65,000 employees worldwide. Through its various brands, including Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, Unity Lab Services, Patheon, and PPD, the company helps customers address a wide range of challenges, from routine testing to complex research and development projects in the fields of life sciences, medical diagnostics and therapeutics, and analytical chemistry.