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Danaher CEO Outlines Financials and China Expectations at JP Morgan

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NEW YORK — Speaking at the 43rd annual JP Morgan Healthcare Conference, Danaher CEO Rainer Blair said that the firm's Q4 core revenues are expected to be essentially flat, exceeding its earlier expectation of a decline in the low-single-digit percent range. Total revenues are expected to increase in the low-single-digit percent range year over year, the firm said in a statement on Monday. 

Full-year 2024 estimated revenues are expected to total approximately $24 billion. Diagnostics revenues are estimated to be about $9.8 billion, up from $9.58 billion in 2023, while Life Sciences revenues are expected to rise to approximately $7.3 billion from $7.14 billion in the previous year. Biotechnology revenues are estimated at approximately $6.8 billion, down from $7.17 billion in 2023. 

Blair said the Diagnostics business was performing slightly above expectations, led by higher respiratory sales at Cepheid, while the Life Sciences business was modestly better than anticipated due to strong instrument sales. The Biotechnology business was in line with expectations. 

Blair noted that this is the second consecutive quarter of stronger-than-expected Life Sciences instrument sales, seen primarily in developed markets, like the US and Europe, and in the pharmaceutical and applied end markets. 

Regarding the Diagnostics business, Blair said that he still believes Danaher's previous estimates that endemic respiratory testing revenues will be about $1.5 billion per year are correct but that it will continue to review its estimate after the higher-than-expected testing volumes in Q4. 

Blair also commented on Danaher's performance in China, noting that it has reached a "degree of stability" at a lower activity level and that he believes the market will recover. In the fourth quarter, China revenues were down in the mid-single-digit percent range, he added. Life Sciences revenues in China were down incrementally, with some instrument orders related to the Chinese stimulus package. 

China will likely not reach pre-pandemic growth levels but is expected to grow in the high-single-digit percent range. "We believe that in the long term, China will be accretive to our overall growth," Blair said. 

Despite the better-than-expected Diagnostics revenues driven by respiratory testing at Cepheid, Blair noted that the volume-based procurement program in China has had an impact on the segment's performance. While the start of the VBP program in China was slow to affect the Diagnostics business, Blair said the program began to accelerate toward the end of Q4 2024 and led to some softness in the quarter. 

The firm previously said it expects the VBP program to have a $50 million per year impact on Diagnostics revenues. Blair noted that it did not see that impact in 2024, so there's "probably a little bit of catch up going on there." 

The company's "bias for capital allocation … remains M&A," Blair said. Danaher has recently seen an uptick in activity in its M&A funnels and in the broader financial markets that could suggest an appetite for dealmaking, although company valuations are still "a little bit elevated." 

The increase in activity "is indicative of the fact that there's opportunity ahead," Blair said.