By Sahil Pandey and Puyaan Singh
April 23 (Reuters) – Thermo Fisher Scientific said on Thursday it does not expect demand from U.S. and Chinese academic and government customers to recover this year and warned of inflationary risks tied to the war on Iran, sending its shares down 8%.
Life-sciences tools and services companies have been contending with cautious post-pandemic funding for smaller biotechs and weak academic research funding.
The Trump administration has been slashing funding and freezing grants for universities and research bodies to which Thermo Fisher provides its products and services.
“Our assumption is that for the year, we would see greater stability and the U.S. end market improving modestly over time, but not back to normal,” said CEO Marc Casper, adding the U.S. and China academic and government market’s conditions are below normalized levels.
WAR CREATES INFLATIONARY PRESSURE
The Middle-East conflict is expected to create some modest level of inflationary pressure, Casper said on a post-earnings call with analysts.
“Given the daily variability in oil prices, we felt it appropriate to put a placeholder in the guide for future quarters, for the risk of inflation that we aren’t fully able to mitigate,” said finance chief Jim Meyer.
The comments clouded the company’s upbeat results and annual profit forecast raise.
It now sees adjusted earnings between $24.64 and $25.12 per share for the full-year, from $24.22 to $24.80 previously estimated, citing the strong first quarter and benefits from its recently closed acquisition of clinical trial data firm Clario.
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. A few analysts also linked the move to underperformance of some segments.
Thermo Fisher reported first-quarter adjusted earnings per share of $5.44, far ahead of analysts’ estimate of $5.24.
(Reporting by Sahil Pandey and Puyaan Singh in Bengaluru; Editing by Shailesh Kuber)
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