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Danaher Q3 Revenues Rise 7 Percent

NEW YORK (GenomeWeb) – Danaher today reported a 7 percent year-over-year increase in its third quarter revenues with its diagnostic revenues up 3 percent. 

For the three months ended Sept. 28, 2018, the Washington-based conglomerate tallied $4.85 billion in total revenues, up from $4.53 billion in Q3 2017. It beat the consensus Wall Street estimate of $4.80 billion. 

Diagnostic revenues totaled $1.50 billion compared to $1.45 billion a year ago, according to the company's Form 10-Q filed with the US Securities and Exchange Commission. On a conference call following the release of the results, company President and CEO Thomas Joyce said that core revenues in the segment grew 5.5 percent year over year. 

Within diagnostics, Beckman Coulter saw core revenue growth in the low-single digits, Joyce said, with strength in the immunoassay and automation businesses. He noted that the company is "very encouraged" by the market reception to the new the DxH 520 and DxH 900 hematology analyzers. 

Beckman also recently launched the DxA 5000 system, a clinical lab automation solution that reduces the number of required manual steps. 

"We expect this advancement to help drive meaningful cost savings in the laboratory while simultaneously improving lab quality and turnaround time for faster diagnoses and better patient outcomes," Joyce said. 

Among Danaher's other businesses in diagnostics, both Radiometer and Leica Biosystems' core revenues were up in the high-single digits, while Cepheid was up in the double digits, Joyce said. 

He noted, in particular, the launch of Cepheid's GeneXpert Edge in July for decentralized molecular diagnostic testing. The system is intended initially for tuberculosis testing in India and Africa, and Joyce noted the Edge can provide test results for TB in less than two hours to support a "localized test-and-treat approach to advance the goal of eradicating tuberculosis and other infectious diseases."   

Meantime, the life sciences segment, Danaher's largest, posted $1.60 billion in revenues, up 15 percent year over year from $1.39 billion a year ago with core growth of 9.5 percent. 

Beckman's life science revenues grew in the high-single digits with "positive" results across most of its major product lines and geographies. 

"Recent new product launches focused on higher-growth biologics and genomics markets are helping Beckman increase their customer win rate, and we believe they continue to gain share relative to the market," Joyce said. 

Sciex revenues also grew in the high-single digits year over year, he added, as did Leica Microsystems. 

In March, Danaher said it would acquire genomics consumables company Integrated DNA Technologies. Joyce said on the call that the business is "off to a great start at Danaher" and delivering mid-teens revenue growth. 

Among Danaher's other segments, dental revenues slid 2 percent year over year to $679.5 million from $694.0 million, while environmental and applied solutions rose 8 percent to $1.07 billion from $992.9 million.

Speaking about the M&A environment, Joyce said that Danaher has "tremendous capacity" for acquisitions. The firm has paid off the $2 billion price tag for IDT and the M&A "pipeline is good and solid. We've had tremendous conversations across a number of the platforms, and we think there's an opportunity in both small and large transactions." 

While valuations are "relatively rich today," the firm continues to keep an eye open for what is available, boosted by its healthy balance sheet, Joyce said. 

For Q3 2018, Danaher reported its R&D spending increased 8 percent year over year to $301.2 million from $279.2 million, while its SG&A costs grew 4 percent to $1.56 billion from $1.50 billion. 

Danaher had a profit of $663.7 million, or $.93 per share, compared to a profit of $572.1 million, or $.81 per share, in Q3 2017. Adjusted EPS was $1.10 and beat the consensus analysts' estimate of $1.08. 

Danaher ended Q3 2018 with $776.2 million in cash and cash equivalents. 

The firm forecast EPS of between $1.04 and $1.07 for the fourth quarter. Adjusted EPS is expected in the range of $1.25 to $1.28. 

For full-year 2018, Danaher increased its EPS forecast to a range of $3.72 to $3.75 from a previous range of $3.64 to $3.71. Adjusted EPS was changed to a new range of between $4.49 and $4.42 from a previous range of $4.43 to $4.50. 

In morning trading on the New York Stock Exchange, Danaher's shares were down 2 percent at $102.61.