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Life Sciences, Diagnostics Drive Danaher Q2 Revenues Up 4 Percent

NEW YORK – Danaher today reported a 4 percent year-over-year increase in its second quarter revenues, which included a 6 percent rise in life sciences segment revenues and a rise of almost 5 percent in its diagnostics segment.

For the three months ended June 28, total revenues reached $5.16 billion, up from $4.98 billion a year ago. It beat the consensus Wall Street estimate of $5.08 billion. Core revenue growth was about 6 percent, the Washington, DC-based conglomerate said.

In life sciences, revenues grew to $1.71 billion from $1.61 billion in Q2 2018, the company said in its Form 10-Q filed with the US Securities and Exchange Commission. Core revenue growth was almost 8 percent, Danaher President and CEO Thomas Joyce said on a conference call. Beckman Coulter's life sciences business grew in the high-single digits, paced by flow cytometry revenues as well as its particle counting and characterization business.  During the quarter Beckman Coulter acquired Cytobank, a single-cell data analysis and software-as-a-service company.

Sciex's core revenues grew in the mid-single digits, Pall was up in the high-single digits, and Integrated DNA Technologies, which Danaher acquired a year ago, grew in the double digits, Joyce said.

In diagnostics, revenues grew to $1.62 billion from $1.55 billion a year ago. Core revenues were up almost 8 percent. Beckman Coulter's diagnostics business grew in the mid-single digits, Joyce said, noting particular strength in China.

Additionally, immunoassay and automation saw strength in the quarter, while new product launches have created momentum, Joyce said. Danaher is especially encouraged by "ongoing improvements" in the hematology business, where Beckman's DxH 900 hematology analyzer has seen strong global demand.

Cepheid, meanwhile, was up by more than 20 percent year over year, with healthy growth in North America and "high-profit" markets. On the conference call, Joyce said that high-burden developing countries remain a major growth driver, but minus that market Cepheid was still up in the mid-teens in "many of the core areas and core assays."

Assay sales for infectious diseases, including flu, respiratory syncytial virus, sexual transmitted diseases, and strep were strong, he said, noting that the flu season lingered into April, "which probably, on the margin, helped growth a bit."

Since Danaher acquired Cepheid in September 2016, Cepheid has netted more than 300 new customers, Joyce noted, bringing the total installed base to more than 20,000. "Over time, I think we're going to see some penetration into physician office labs in an even deeper way with our CLIA-waived Xpress offerings," he said.

Among Danaher's other diagnostics business, Radiometer revenues were up in the high-single digits, and Leica Biosystems grew in the mid-single digits.

Within Danaher's other segments, dental revenues were down 3 percent to $712.1 million from $733.4 million, while environmental and applied solutions revenues rose 2 percent to $1.11 billion from $1.09 billion.

In February, Danaher announced it would buy General Electric's Biopharma business for $21.4 billion. That business provides a variety of instruments, consumables, and software used for biopharmaceutical development and manufacturing, and had revenues of around $3 billion in 2018. Joyce said today that the acquisition remains on track to be completed in the fourth quarter.

In Q2 2019, Danaher's R&D costs grew 3 percent year over year to $321.8 million from $311.7 million, while its SG&A spending rose 2 percent to $1.67 billion from $1.64 billion.

The firm posted a profit of $731.3 million, or $.97 per share, in the recently completed quarter compared to a profit of $673.8 million, or $.95 per share, in Q2 2018. Adjusted EPS was $1.19 and beat analysts' average estimate of $1.16.

Danaher finished Q2 2019 with $5.43 billion in cash and cash equivalents.

For the third quarter, Danaher expects EPS in the range of $.86 to $.89 with non-GAAP EPS expected to be between $1.12 and $1.15.

Its full-year 2019 EPS forecast was adjusted to a new range of $3.38 to $3.43 from an earlier guidance of $3.34 to $3.42. Adjusted EPS was changed to a new range of $4.75 to $4.80 from a previous range of $4.72 to $4.80.

In early morning trading on the New York Stock Exchange, Danaher's shares were up almost 2 percent to $141.91.