Danaher Q4 Revenues Climb 6 Percent

NEW YORK – Danaher reported on Thursday a 6 percent year-over-year increase in total sales for the fourth quarter, beating the consensus Wall Street estimate.

For the three months ended Dec. 31, 2019, the Washington, DC-based conglomerate posted $4.87 billion in total sales compared to $4.60 billion in the year-ago period. Analysts' average estimate was for $4.80 billion.

Core revenues grew at 6 percent, the company said, with continuing operations growing at more than 5 percent year over year. Currency exchange effects added 1 percent to growth and the impact of acquisitions reduced growth by .5 percent, the company said.

By sector, Life Sciences grew 7 percent year over year to $1.92 billion from $1.79 billion, while Diagnostics also rose 7 percent to $1.80 billion from $1.68 billion. Environmental and Applied Solutions increased 2 percent to $1.15 billion from $1.13 billion.

On a conference call following the release of the financial results, Danaher President and CEO Thomas Joyce said that within the life sciences business, Beckman Coulter's core revenues were up in the mid-single digits in Q4 with strength across most major geographies and product lines. For full-year 2019, sales were up in the high-single digits and the business surpassed $1 billion for the first time, he added.

Also in life sciences, Sciex grew in the low-single digits in Q4, while Pall was up in the high-single digits. Integrated DNA Technologies (IDT) grew in the double digits, Joyce said.

In the diagnostics segment, Beckman Coulter was up in the low-single digits during the recently completed quarter against a tough year-ago comparison.

Meanwhile, Joyce said full-year "2019 was a great year for Beckman as the team achieve mid-single digit growth [in the diagnostics segment], their best annual core growth rate since we acquired the business in 2011."

Meanwhile, Radiometer and Leica Biosystems were up in the double digits in Q4, and Cepheid grew at more than 20 percent year over year. Cepheid surpassed $1 billion in annual revenue in 2019, Joyce said, adding that since Danaher bought the business in 2016, core revenues have compounded annually at about 20 percent.

The installed base has grown from approximately 13,000 systems since the acquisition to about 23,000 systems, and Cepheid "is poised to continue taking market share in this highly attractive, fast growing" molecular diagnostics space, Joyce said.

He added that Cepheid, as well as IDT, are actively involved "in taking on this challenge" of the 2019-nCoV coronavirus that has hit China. In particular, he said the two business are supporting the US Centers for Disease Control and Prevention's work in releasing qPCR probes and primers "designed specifically to detect the virus," though he did not elaborate on the work that Cepheid and IDT have been doing. 

Joyce also said that to date, the 2019-nCoV crisis in China has not affected Danaher's business, though he acknowledged it is still early days.

Danaher's R&D costs in Q4 2019 grew 6 percent to $293.8 million from $276.0 million in Q4 2018, while its SG&A costs increased 4 percent to $1.45 billion from $1.39 billion.

Net earnings from continuing operations – not including Danaher's dental segment, which was spun out into its own publicly traded firm, Envista, in September 2019 – was $792.9 million, or $1.07 per share, in the recently completed quarter compared to $683.8 million, or $.96 per share, a year ago. Non-GAAP EPS for Q4 2019 was $1.28, beating the consensus Wall Street estimate of $1.25.

For full-year 2019, Danaher's revenues increased 5 percent year over year to $17.91 billion from $17.05 billion in 2018. It beat analysts' average estimate of $17.85 billion.

Life Sciences revenues improved 7 percent to $6.95 billion from $6.47 billion. Diagnostic revenues grew 5 percent to $6.56 billion from $6.26 billion, and Environmental and Applied Solutions revenues grew 2 percent to $4.40 billion from $4.32 billion. 

Danaher's R&D spending for 2019 was up 7 percent year over year to $1.13 billion from $1.06 billion, and its SG&A costs grew 4 percent to $5.59 billion from $5.39 billion.

The firm posted net earnings from continuing operations of $2.43 billion, or $3.26 per share, in 2019 compared to $2.41 billion, or $3.39 per share, in 2018. Non-GAAP EPS for 2019 was $4.42 and beat the consensus Wall Street estimate of $4.39.

The company ended the year with $19.9 billion in cash and cash equivalents.

For the first quarter of 2020, it forecast EPS of $.78 to $.81 and non-GAAP EPS of $1.06 to $1.09.

For full-year 2020, Danaher expects EPS of $3.96 and $4.06, and non-GAAP EPS of $4.80 to $4.90. Q1 and full-year 2020 estimates do not include the impact of the pending acquisition of GE Biopharma, which is expected to close in Q1, Danaher said. 

In late-morning trading on the Nasdaq, Danaher's shares inched up a fraction of 1 percent to $165.70