By Mrinalika Roy
(Reuters) -Thermo Fisher Scientific Inc on Wednesday reported better-than-expected quarterly profit and raised its full-year forecast for revenue as well as earnings, fuelled by strong COVID-19 related sales and recovery in its mainstay business.
Shares of the world's largest maker of scientific instruments rose nearly 3% to touch a record high of $625.99 after it also raised its outlook for next year.
Thermo Fisher (NYSE:TMO) makes and sells coronavirus tests and also provides raw materials and fill-and-finish services for COVID-19 vaccine makers. A surge in cases in recent months due to the virulent Delta variant has led to a rebound in demand for tests.
The company reported $2.05 billion of COVID-19 response revenue in the third quarter, which includes sales related to vaccines and therapies as well as diagnostic testing, up from $1.9 billion in the second quarter.
"The extra COVID revenue gives them more free cash flow, but the underlying story remains strong, very robust and investors should be happy with the results," Atlantic Equities analyst James Mainwaring told Reuters. "The COVID benefit is just giving them cash."
Thermo Fisher's mainstay business revenue grew by 10% organically in the quarter and the company raised its 2021 revenue forecast by $1.2 billion to $37.1 billion.
It now expects adjusted profit of $23.37 per share, up from its previous forecast of $22.07 per share.
However, the company said it continues to assume COVID-19 testing related revenue of $450 million in the fourth quarter, and expects testing to bring in $750 million next year.
Thermo Fisher said the underlying demand for its product and service offerings used in the production and development of vaccines is very robust and it expects to carry the momentum into 2022.
"Vaccine mandates, booster shots and children add to the durability of the demand for vaccine and therapies," Chief Executive Officer Marc Casper said on a post-earnings conference call.