Thermo Fisher Scientific Inc. (NYSE: TMO) raised its full-year 2026 revenue and profit forecasts on October 21 after third-quarter organic revenue growth reached 6%, which the company said was about two percentage points ahead of its prior expectations. Revenue rose 9% to $12.14 billion, and adjusted earnings per share increased 15% to $6.68.
The quarter extends a recovery in spending by drug developers that the company said took hold in the second quarter, following a prolonged post-pandemic slowdown across the life sciences tools industry. Sales to pharma and biotech customers, Thermo Fisher's largest market, grew at a high-single-digit rate, the company said.
"The improved end market conditions we saw in Q2 continued in Q3, and our team executed very well to capture the opportunities," Chairman and Chief Executive Officer Marc N. Casper told analysts on a conference call.
Thermo Fisher now expects 2026 revenue of $47.7 billion to $48.2 billion, representing 7% to 8% growth over 2025, and adjusted EPS of $25.13 to $25.43, representing 10% to 11% growth. It raised its full-year organic growth forecast to 4% and lifted its free cash flow outlook to $7 billion to $7.5 billion.
#Thermo Fisher Keeps Fourth-Quarter Growth Forecast at 4% Despite Faster Third Quarter
Thermo Fisher, based in Waltham, Massachusetts, sells laboratory instruments, reagents and consumables and provides clinical research and drug manufacturing services. Its brands include Thermo Scientific, Fisher Scientific, Patheon and PPD.
The company held its fourth-quarter organic growth forecast at 4%, below the third-quarter pace. Chief Financial Officer Jim Meyer said much of the quarter's strength came from Pharma Services, the unit that makes medicines on behalf of drug companies, where some customer work landed earlier than planned.
"There is some customer activity timing that was completed in the third quarter, but we are fully offsetting that with the momentum of the business in the fourth quarter to maintain our guidance," Meyer said on the call.
Part of the profit gain came from a one-time item. Meyer said tariff refunds recovered during the quarter added about $0.15 to adjusted EPS, net of reinvestment, and about 50 basis points to adjusted operating margin, which rose to 24.5% from 23.3% a year earlier. The refunds were not included in the company's prior guidance.
#Lab Products and Biopharma Services Revenue Rises 15% as Reagent Sales Lag
The Laboratory Products and Biopharma Services segment, the company's largest, grew revenue 15% to $6.86 billion, with organic growth of 10%. Analytical Instruments revenue rose 6% to $2 billion, and its segment margin widened to 26.9% from 22.6%, helped by demand for electron microscopes from semiconductor customers, the company said.
Growth was slower elsewhere. Life Sciences Solutions, which sells research reagents and bioproduction products used to make biologic drugs, grew 1% organically. Specialty Diagnostics revenue fell 6% to $1.1 billion after the sale of the microbiology business closed during the quarter, and was flat on an organic basis.
Casper said the biotech recovery is moving in stages, with clinical research improving first and reagent demand expected to follow. "Biotech continues to improve. We are getting good growth out of biotech, and the customer confidence there is strong," he said.
Academic and government revenue was flat. Universities and research institutes that buy Thermo Fisher products have faced federal funding cuts and grant freezes under the Trump administration. Sales in China grew at a low-double-digit rate, the company said.
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#Thermo Fisher Lifts Free Cash Flow Forecast After $4 Billion in 2026 Buybacks
Free cash flow for the first nine months was $4.62 billion, compared with $3.32 billion a year earlier. The company has repurchased $4 billion of its shares in 2026 and spent $8.88 billion on acquisitions, net of cash acquired, including Clario, which Casper said is performing well.
Long-term obligations rose to $39.1 billion at the end of the quarter from $35.9 billion at the end of 2025. Meyer said net leverage stood at 2.9 times net debt to adjusted EBITDA, a measure of operating profit before interest, tax and noncash charges.
New products in the quarter included the Orbitrap Isora mass spectrometer for isotope ratio analysis, which helps trace the origin of samples, and an FDA-cleared screening test for autoimmune conditions including lupus. With Mayo Clinic, the company launched Precure, a research initiative combining biological samples and clinical data with Thermo Fisher's proteomics technologies to identify early signs of disease.
The company also opened its first AI-Automation Innovation Center in South Korea and an automated distribution center in Kentucky. Casper said on the call that wider use of AI by drug developers could improve returns on research spending and lead to more investment.
#Risks to the Outlook
The fourth-quarter forecast depends on business momentum offsetting Pharma Services work that was pulled into the third quarter. The tariff refund benefit is a one-time item, and reagent demand from biotech customers has yet to recover, according to the company. Thermo Fisher also lists customer capital spending, government funding policies and currency movements among the factors that could affect results.
Management expects 4% organic growth for both the fourth quarter and the full year, and Casper said the company aims to return to its longer-term organic growth rate of about 7% in late 2027 or early 2028, though research funding, the pace of the biotech recovery and higher debt from acquisitions remain key risks to the outlook.