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Siemens Healthineers FY Q1 Diagnostics Revenues Up 5 Percent; Firm Inks Deal With Quest Diagnostics

NEW YORK – Siemens Healthineers said Monday that its fiscal year 2020 first quarter revenues were up 9 percent year over year. On a comparable basis, the firm posted a year-over-year revenue increase of 6 percent.

The firm also announced Monday that it has inked a contract to become the primary supplier of products for immunoassay testing to Secaucus, New Jersey-based Quest Diagnostics.

For the three months ended Dec. 31, 2019, Siemens Healthineers reported total Q1 revenues of €3.59 billion ($3.97 billion), up from €3.30 billion in the prior-year quarter.

The Erlangen, Germany-based company reported Diagnostics revenues of €1.01 billion, up 5 percent from €964 million in Q1 2019. On a comparable basis, Siemens Healthineers posted a 3 percent year-over-year Diagnostics revenue increase. Significant revenue growth came from China, but the Americas and Europe, the Middle East, and Africa recorded only slight increases, the firm said.

The company posted a Diagnostics segment adjusted EBIT margin of 3.1 percent that was mainly impacted by higher than normal ramp-up costs associated with Atellica Solution sales.

Meanwhile, the Quest deal follows news that the reference laboratory company had been searching for a single platform vendor for its immunoassay testing. Siemens' US Food and Drug Administration-cleared Atellica Solution for mid- and high-volume labs consists of flexible, scalable, and automation-ready immunoassay and clinical chemistry analyzers. Siemens said it shipped more than 600 analyzers in Q4 2019.

Siemens said that assuming successful execution of sequenced project phases during a new multiyear agreement, it foresees Quest deploying up to 120 Atellica Solution immunoassay analyzers across 19 esoteric and core laboratories throughout the US, while building on an existing partnership.

A highly automated Quest lab in Clifton, New Jersey will feature Atellica Solution immunoassay analyzers connected to a FlexLab automation system from Switzerland-based Inpeco. The lab will be used for high-throughput, multidisciplinary testing and to increase productivity, reduce turnaround time, decrease unwanted variations, and lower operational costs. The new flagship lab is expected to be completed in 2021, Siemens said.

Financial and other terms of the deal were not disclosed.

"We started the new fiscal year and the upgrading phase of our Strategy 2025 with a growth-intensive first quarter," Bernd Montag, CEO of Siemens Healthineers, said in a statement. "Profitability was held back by temporary effects."

In other business segments, the firm's Imaging revenues were €2.22 billion, up 10 percent from €2.02 billion in the prior-year quarter, and its Advanced Therapies revenues were €404 million, up 14 percent year over year from €355 million.

Siemen's Healthineers' net income for the quarter was €304 million, or €.30 per share, compared to €345 million, or €.34 per share, in Q1 2019. The firm posted an adjusted earnings per share of €.35.

The company's R&D expenses were €335 million, up 7 percent year over year from €312 million, and its SG&A expenses were €621 million, up 16 percent from €536 million in the prior-year quarter.

Siemens Healthineers confirmed its guidance for FY 2020, continuing to expect comparable revenue growth to be in the range of 5 percent to 6 percent. The company anticipates adjusted earnings per share to be in the range of 6 percent to 12 percent above the year-ago figure of €1.70.