Thermo Fisher cuts 2021 Covid-19 test sales forecast by $900 million

Thermo Fisher Scientific Inc on Wednesday raised its full-year revenue outlook, but cut its COVID-19 test sales forecast by $900 million, citing slowing demand for the rest of the year as vaccinations ramp up.

The company, one of the major providers of coronavirus tests, benefited from strong demand during the pandemic, but rising vaccination has hit demand for these tests and other test makers have also warned of a slump.

Shares of Thermo Fisher fell 1% to $524.71 in midday trading.

"We decided that the prudent thing to do is to assume that testing moderates in the second half (of the year)" said Marc Casper, Thermo Fisher's chief executive officer, in an interview with Reuters.

Thermo Fisher, the biggest maker of scientific instruments, now expects COVID-19 testing revenue of $4.9 billion for 2021, down from $5.8 billion it expected earlier.

The company, however, said demand for its raw materials used in COVID-19 vaccines and therapies is likely to sustain in the year and easing of curbs led to growth in its mainstay businesses.

Thermo Fisher is positioning itself where the downside scenario risks to its outlook are very low, said Atlantic Equities LLP analyst James Mainwaring, adding that the results show the strong performance of its non-COVID-19 business.

The company raised its overall 2021 revenue forecast by $300 million to $35.90 billion and now expects adjusted profit of $22.07 per share, up from its previous outlook of $21.97 per share.

"The increase is driven by the underlying performance of our normal activities, not the COVID-19 response work that we have been doing," Casper said.

Thermo Fisher recorded $1.9 billion in COVID-related revenue in the second quarter, down from $2.9 billion in the previous quarter, but posted a 27% organic revenue growth in its base business.

Excluding items, it earned $5.60 per share beating analyst estimates of $5.44 per share, according to Refinitiv IBES.

(Reporting by Amruta Khandekar in Bengaluru; Editing by Shailesh Kuber and Ankur Banerjee)