US-based life sciences giant Thermo Fisher Scientific Inc. (NYSE: TMO) has released its financial results for the second quarter of 2023, showing a 3% year-on-year (YOY) decrease in revenues in constant currency terms, amounting to USD 10.69 billion. CEO Marc Casper attributed the decline to a more challenging macroeconomic environment, citing slower economic activity in China and increased business caution in spending as key factors.
Downward Revision of Full-Year Performance Forecasts
In response to the economic downturn, Thermo Fisher has revised its full-year performance forecasts downwards, now anticipating 2023 revenue to fall within the range of USD 43.4 billion to USD 44.0 billion. The company expects core organic revenue growth to be between 2% to 4% for the year.
Geographic Performance Insights
During the earnings conference call, CFO Stephen Williamson provided further details on the geographic performance, highlighting that North America experienced a mid-single-digit decline, Europe saw low-single-digit growth, and Asia-Pacific, including China, faced a mid-single-digit decline. China’s economic activity, which was robust in Q1’23, “significantly slowed” in Q2, resulting in reduced customer activity. Williamson stated, “Approximately one-third of the change in core revenue was driven by lower economic activity in China and the remainder was driven by more cautious spending across our customer base globally, particularly in biotech.”
Assumptions for Full-Year Performance Downgrade
The downgrade in full-year performance is based on the assumption that the current economic situation, both in China and globally, will persist. This outlook reflects the company’s cautious approach in the face of global economic uncertainties.-Fineline Info & Tech