Thermo Fisher raises COVID test revenue forecast by $1 billion

A scientist researcher, wearing protective gear, works in a lab at the Thermo Fisher plant, former Novasep, producing COVID-19 vaccines for AstraZeneca in Seneffe, Belgium, February 10, 2021. REUTERS/Yves Herman/File Photo

Feb 2 (Reuters) – Thermo Fisher Scientific Inc (TMO.N) on Wednesday raised its COVID-19 testing revenue guidance for 2022 by $1 billion and said it based its forecasts on an assumption the disease would become endemic from the second half of the year.

The manufacturer of medical products now forecasts COVID testing revenue of $1.75 billion, with majority of it generated in the first half and then an estimated $100 million per quarter, anticipating that the disease will become contained in certain regions, making mass testing less critical.

Thermo Fisher is among the first companies to project revenue for the endemic phase of the disease as most companies have remained conservative over the development of a pandemic that has stretched into its third year.

“That’s a rough number. We’ll give it more precision when we’re actually in the endemic phase,” chief executive officer Marc Casper said in a conference call with analysts.

The Waltham, Massachusetts-based company also raised its overall forecast for revenue in 2022 by $1.5 billion to $42 billion and adjusted earnings by $1.07 to $22.43 per share after it beat quarterly profit and sales estimates on Wednesday.

Thermo Fisher and its rivals have seen sales of coronavirus tests rising in recent months driven by a surge in the Omicron-led COVID cases, especially with the U.S. government mandating large employers to have their workers tested weekly.

In 2021, COVID-related products accounted for about 23% of Thermo Fisher’s sales.

Its fourth-quarter net sales rose $10.70 billion from $10.55 billion a year earlier, beating analysts’ average estimate of $9.68 billion.

The growth in revenue was aided by $2.45 billion in sales of COVID-related products, compared with $2.05 billion in the third quarter.

Excluding one-off items, the company posted earnings of $6.54 per share, higher than the consensus analyst estimate of $5.62 per share.

Reporting by Manas Mishra, Dania Nadeem and Leroy Leo in Bengaluru; Carl O’Donnell in New York
Editing by Vinay Dwivedi and Tomasz Janowski

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