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Danaher Q2 Revenues Spike 19 Percent

NEW YORK – Danaher reported on Thursday morning that its sales grew more than 19 percent year over year during the second quarter of 2020, including a 54 percent jump in its Life Sciences segment.

For the three months ended July 3, the Washington DC-based conglomerate recorded $5.30 billion in total sales compared to $4.44 billion in the year-ago period. It beat the consensus Wall Street estimate of $4.95 billion.

The results include the Cytiva business, formerly the GE biopharma business, which Danaher acquired in March. 

Acquisitions had a negative impact of 21.5 percent year over year, the firm said, while currency effects had a positive impact of 2 percent. Cytiva added 4 percent to the sales growth, and including the business, core sales grew 3.5 percent. Excluding the business, core revenues were down 0.5 percent.

According to the firm's Form 10-Q for Q2 2020, filed with the US Securities and Exchange Commission, the Life Sciences segment had $2.64 billion in sales, up from $1.71 billion in Q2 2019. This segment includes the Cytiva business.

Core Life Sciences revenues were up 8 percent year over year, Danaher President and CEO Thomas Joyce said on a conference call, with Pall biotech and Integrated DNA Technologies each growing in the high teens or better.

Sciex, which houses Danaher's mass spectrometry business, and Leica Microsystems were down in the quarter, however.

Meanwhile, sales in the Diagnostics segment grew 2.5 percent to $1.66 billion from $1.62 billion a year ago, and Environmental and Applied Solutions segment sales decreased 10 percent to $994.8 million from $1.11 billion.

Diagnostics core revenue growth was 5 percent. On the call, Joyce highlighted the Cepheid business, which he said shipped more than 6 million cartridges for SARS-CoV-2 testing in Q2 2020. The firm's Xpert Xpress SARS-CoV-2 test received Emergency Use Authorization from the US Food and Drug Administration in March.

Cepheid's core revenues grew more than 100 percent year over year on demand for COVID-19 testing, he noted.

He also said that Cepheid has developed a rapid 4-in-1 test for detection of the coronavirus, flu A, flu B, and respiratory syncytial virus from a single patient sample, which can provide results within 35 minutes. Cepheid anticipates launching the test in Q3.

Cepheid also delivered a record number of instruments in Q2, with the installed base growing in the double digits and the number of new instrument placements "more than four times that of a typical quarter," Joyce added.

Cepheid's instrument installed base is now more than 26,000 globally, he said.

Within Diagnostics, Beckman Coulter's diagnostics and Leica Biosystems revenues declined during Q2, the result of decreases in patient testing volumes as elective patient surgeries and wellness procedures took a hit.

Separately, Beckman Coulter announced today that it has received 501(k) clearance from the US Food and Drug Administration for its PK7400 Automated Microplate System and related reagents. 

"We are tackling the challenges presented by the COVID-19 pandemic head-on, providing critical diagnostic testing capabilities and accelerating our customers' pursuit of new vaccines and treatments," Joyce said in a statement. "We're fortunate to navigate through this environment from a position of strength and believe that the combination of our team's [Danaher Business System]-driven execution, resilient portfolio, and strong balance sheet uniquely position Danaher in 2020 and beyond."

Danaher's Q2 R&D spending increased 14 percent year over year to $322.6 million from $282.1 million. Its SG&A spending rose 22 percent to $1.69 billion from $1.39 billion a year ago.

The company recorded a profit of $927.3 million, or $1.24 per share, for Q2 compared to a profit of $731.3 million, or $.90 per share, a year ago. Its adjusted EPS for the recently completed quarter was $1.44 and beat the consensus Wall Street estimate of $1.09.

Danaher finished the quarter with $5.54 billion in cash and cash equivalents.

For Q3, it forecast non-GAAP core revenue growth in the mid to high-single digit range.

In Thursday morning trading on the Nasdaq, Danaher's shares were up almost 3 percent to $201.29.