Thermo Fisher Scientific (NYSE: TMO) reported third-quarter FY2026 earnings per share (EPS) of 6.68 against an analyst estimate of 6.4, and revenue of $12.14B against an estimate of $11.95B. Revenue was 9.1% higher than the $11.12B in the year-ago quarter. The company also raised its full-year outlook, though part of the profit lift came from a one-time tariff refund.
Key facts
- Reported 2026-10-21: EPS of 6.68 vs. an estimate of 6.4 (a beat of $0.28, or 4.4%). Revenue of $12.14B vs. an estimate of $11.95B (a beat of $184.3M, or 1.5%).
- Year-ago comparison: Revenue for the quarter ended 2026-09-26 was up 9.1% from $11.12B in the quarter ended 2025-09-27. Net income was up 6.5%.
- Profit (GAAP, meaning standard accounting rules): Net income was $1.72B, with diluted EPS of 4.64 vs. 4.27 a year earlier.
- Outlook: Management raised its full-year revenue range to $47.7B-$48.2B and its adjusted EPS range to $25.13-$25.43.
- Stock: The latest quote was 676.54 USD as of 2026-10-22, down 2.52%. The 52-week range is 435.27-705.79 USD.
What happened
Thermo Fisher sells instruments, lab supplies, and outsourced services to drug makers, biotech firms, hospitals, universities, and industrial customers. In the quarter ended 2026-09-26, it beat on both lines of the report. EPS was above the estimate by 4.4%, and revenue by 1.5%. The larger EPS beat suggests profit gained more than sales did. The EPS figure compared with the estimate is adjusted EPS, which management reported as $6.68, up 15%. Adjusted figures are non-GAAP measures, reconciled to GAAP in the company's press release. The GAAP diluted EPS of 4.64 is the standard-accounting figure.
On growth quality, Meyer said reported revenue rose 9%, made up of 6% organic growth, a 4% contribution from acquisitions (Clario and the filtration and separation business), and a 1% decrease from the divestiture of the microbiology business.
Management named several drivers on the earnings call:
- Pharma Services. This outsourced drug-development and manufacturing business was strong. CFO Jim Meyer said part of that strength was timing between the third and fourth quarters. Some work arrived in Q3 that would otherwise have landed in Q4.
- Pharma and biotech recovery. Customer demand in pharma and biotech grew at a high single-digit rate. CEO Marc Casper said "confidence has increased meaningfully over the last few quarters." He pointed to government negotiations that "have gone well" and are "largely behind us," along with strong science, as reasons.
- Analytical Instruments. Demand was strong for electron microscopes, which are used in semiconductor manufacturing.
- Operations. Productivity and higher volumes helped profit. Unfavorable product mix and deliberate investments held some of that back.
- Tariff refunds. The company said refunds added about $60M to adjusted operating income, worth $0.15 of adjusted EPS, with a negligible effect on revenue. Management called this one-time and said it will reinvest part of it in the fourth quarter.
The stock was down 2.52% at the latest quote on 2026-10-22. The company has not explained the move, and we can't say for certain why shares fell. One possibility is that a beat and a raise were already expected, given where the shares sat in their 52-week range.
Why it matters for investors
The five-quarter trend. Gross margin, the share of sales left after the direct cost of making products, rose to 42.8% in Q3 FY2026. That is the highest of the last five quarters, up from 40.7% in Q1 FY2026 and 41.2% a year earlier. Operating margin, which also deducts overhead and R&D, was 18.6%. It recovered from 16.9% in Q1 FY2026 and 17.4% in Q2 FY2026, and sits just under the 18.7% of a year earlier. In short, the first half of FY2026 was a margin dip, and Q3 recovered most of it. The tariff refund likely helped, so the next quarter will show how much of the recovery holds.
Cash flow. Free cash flow (cash from operations minus capital spending) was $2.11B in Q3 FY2026, up from $1.68B in Q2 FY2026 and $816.0M in Q1 FY2026. It was also above the $1.83B of the year-ago quarter. The only quarter in the five-quarter span that was higher was Q4 FY2025, at $2.99B. Management raised its full-year free cash flow outlook to $7B-$7.5B. The company bought back no stock in Q3 FY2026, after $1.00B in Q2 FY2026 and $3.00B in Q1 FY2026, and paid $174.0M in dividends. For the full year, management assumes $4B in buybacks.
Balance sheet. At quarter-end, cash and short-term investments were $6.06B and total debt was $41.37B. FMP's net-debt measure is $35.91B. Shareholders' equity was $54.77B. FMP's financial-strength scores are reasonable: a Piotroski score of 7 (on a 0-9 scale of financial health) and an Altman Z of 3.35.
Valuation vs. peers. On trailing 12-month figures, TMO trades at a price-to-earnings (P/E) ratio of 35.63. P/E is the share price divided by a year of earnings per share. Its net margin is 15.0%. Here is how selected peers compare:
| Company | Market cap | P/E | Net margin | |---|---|---|---| | Thermo Fisher (TMO) | $250.15B | 35.63 | 15.0% | | Agilent (A) | $49.03B | 34.17 | 19.5% | | Bio-Rad (BIO) | $9.72B | 43.64 | 8.6% | | bioMérieux (BMXXY) | $11.99B | 22.51 | 11.6% | | Bruker (BRKR) | $8.73B | -81.99 | -2.0% |
TMO is priced close to Agilent on P/E but earns a lower net margin than Agilent. It is far larger than every peer listed. Bruker's negative P/E reflects losses, so it is not a useful comparison.
Analysts. Of 43 ratings, 36 are Buy and 7 are Hold, with none at Sell, so the consensus is "Buy." Analyst price targets average 688.14 USD, with a median of 730.00 USD, a high of 800.00 USD, and a low of 520.00 USD. The latest quote of 676.54 USD sits just below the average target. On 2026-10-22, RBC Capital kept a Sector Perform rating, while TD Cowen, Barclays, Stifel, and Baird all kept positive ratings. For comparison only, FMP's discounted cash flow model, which estimates what future cash is worth today, gives a value of 415.57 USD per share. Such models are very sensitive to their assumptions.
Stock Expert AI's MoonshotScore. TMO scores 69.6 (Strong). The pillars, measured against its sector, are momentum 90, quality 82, growth 45, valuation 45, and safety 36. In plain terms, the stock has been trending well and the business is high quality. Growth and valuation are middling, and safety is the weak spot. A safety score of 36 is consistent with the large debt load and a share price that has moved a lot over the past year.
What could go wrong.
- Parts of the business were soft. Management said Life Sciences Solutions grew only 1% organically (excluding currency and acquisitions). It described the reagent market as "more muted" and said biotech reagent spending is the next phase still to come. Specialty Diagnostics reported lower revenue, with flat organic growth. Academic and government demand was flat.
- Bioprocess slowed. Growth in this business, which supplies drug manufacturing, eased because of tough comparisons with earlier quarters. Management still expects high single to low double-digit growth over the long term.
- Some of the beat won't repeat. The tariff refund was one-time, and part of the Pharma Services strength shifts work out of Q4.
- The price already assumes a lot. The P/E of 35.63 leaves less room for disappointment.
- Insiders were sellers. Among recent Form 4 filings (the forms insiders file when they trade), there were 0 open-market purchases and 2 sales in the last 90 days. That data may be incomplete, and sales can have many causes.
What to watch next
- 2027 guidance. Management did not give 2027 guidance on the call. Casper said Q4 results and guidance will come on February 2nd at 8:30 A.M., which would be February 2, 2027. FMP's calendar lists 2027-02-04. On the call, analyst Jack Meehan cited a 3%-6% range for 2026-2027, and Casper referred to it as "midterm framing." For the long term, Casper said "truly normal" is 7% organic growth and that it is "not the cap." He said AI could support a stronger long-term outlook, though management did not quantify any AI benefit.
- Fourth-quarter growth. Management kept its Q4 organic growth guidance at 4%, and now expects second-half organic growth of 5%, up from 4% before. Meyer said Q3 included some Pharma Services timing that is offset in Q4.
- Margins. The full-year outlook assumes about 80 basis points (0.80 percentage points) of adjusted operating margin expansion. Watch whether Q4 shows that.
- The slower segments. Check whether Life Sciences Solutions and Specialty Diagnostics improve.
- Buybacks and debt. Look for a return of share repurchases and for any change in debt.
- Analyst expectations. For the period ending 2028-03-26, analysts estimate revenue of $12.44B and EPS of 6.88. For the period ending 2028-06-26, they estimate revenue of $13.23B and EPS of 7.34. The next reported quarter has an EPS estimate of 7.15 and a revenue estimate of $12.85B.
Frequently asked questions
Q: Did Thermo Fisher beat earnings estimates in the third quarter?
Yes. For the quarter ended 2026-09-26, Thermo Fisher reported EPS of 6.68 against an analyst estimate of 6.4, and revenue of $12.14B against an estimate of $11.95B. Revenue was 9.1% above the same quarter a year earlier.
Q: Why did Thermo Fisher stock fall after a beat?
The company has not said, and a single cause is hard to pin down. The shares were down 2.52% at the latest quote of 676.54 USD on 2026-10-22. Possible factors include a share price already near the top of its 52-week range, the one-time tariff refund inside the profit lift, and the 1% organic growth in Life Sciences Solutions. These are reasons to consider, not confirmed explanations.
Q: What is Thermo Fisher's outlook for the full year?
Management raised its full-year revenue range to $47.7B-$48.2B and adjusted EPS to $25.13-$25.43. It also raised its free cash flow outlook to $7B-$7.5B and raised its full-year organic revenue growth outlook to 4%, while maintaining the Q4 organic guide at 4%. The company has not yet given a 2027 outlook. Casper said it will report Q4 results and give guidance on February 2, 2027.
This is educational content, not investment advice. Past performance does not guarantee future results.