Medical equipment maker Thermo Fisher Scientific (TMO.N) on Wednesday cut its annual profit forecast, in anticipation of a potential hit from the U.S. and China tariff war and the Trump administration's proposed cuts to academic research funding.
The company estimates a $400 million hit this year to its sales in China, which represents about 8% of Thermo Fisher's business.
Tariffs are expected to increase the cost of China-sourced parts used in its products, ranging from lab instruments to diagnostic test kits, the company said.
China is a key source of raw ingredients and supplies for the pharmaceutical and medical device industries across the world.
U.S. President Donald Trump has threatened eye-popping import tariffs on China, and the country in turn has responded with tit-for-tat levies, further escalating a global trade war.
The Trump administration has also begun slashing funding for universities and research bodies, and announced layoffs at federal health agencies.
These actions will impact Thermo Fisher, which provides its services including contract research, to biotech companies as well as academic institutions.
The company, however, plans to mitigate the hit through an increase in U.S. manufacturing investments in the range of about $2 billion, supply chain changes and "pricing actions".
Thermo Fisher expects 2025 adjusted profit in the range of $21.76 and $22.84 per share, compared with its previous forecast of $23.10 to $23.50 and analysts' average expectation of $23.25, according to data compiled by LSEG.
For the first quarter ended March 29, the company earned $5.15 per share on an adjusted basis, beating analysts' average estimate of $5.10.
It reported revenue of $10.36 billion, above estimates of $10.23 billion.
