Note: This story has been updated with comments from a conference call discussing the firm's financial results.
NEW YORK – Although Danaher is prepared for an impact of approximately $350 million related to the tariffs that have been put in place by President Donald Trump throughout 2025, company executives said on a conference call to discuss the firm's financial results Tuesday that they have a "number of levers" that they can deploy to account for the headwinds.
Those levers include continuing to regionalize the company's manufacturing network and ensuring that facilities in specific regions are manufacturing products that will be sold in those same regions, along with supply chain adjustments, surcharges, and other cost options, Danaher President and CEO Rainer Blair said.
Danaher CFO Matt McGrew added that if those actions aren't enough or tariffs increase, "we can be much more aggressive if we need to be."
"Everything is on the table here in that situation if that's what we get to," he added. "We'd be looking at more significant surcharges, I think we'd be going after costs even harder, and we'd probably be looking at the manufacturing footprint even harder."
He noted that about half of the tariff headwinds will likely come from Danaher shipping its products in the US to China — which would largely be focused on diagnostic assays — and that half of the headwinds would result from shipping products to the US from Europe.
The company also said that its overall revenues declined 1 percent year over year as revenues in both the Life Sciences and Diagnostics segments contracted, while its Biotechnology segment business grew.
For the three months ending March 31, total revenues were $5.74 billion compared to $5.80 billion in the year-ago period and beat analysts' average estimate of $5.59 billion.
Core revenues were flat year over year, the Washington, D.C.-based conglomerate said. Blair noted that core revenues in developed markets were down slightly, but high-growth markets saw revenues rise in the low-single-digit percentage range.
Blair said in a statement that "revenue, earnings, and cash flow exceeded our expectations in the first quarter — highlighted by continued momentum in bioprocessing and better-than-expected respiratory demand in our molecular diagnostics business."
Revenues in Danaher's Life Sciences segment fell 4 percent to $1.68 billion in Q1 2025 from $1.75 billion in Q1 2024, according to the company's Form 10-Q filed with the US Securities and Exchange Commission. Core revenues were down 4 percent year over year, as core revenues in the instruments businesses declined in the low-single-digit percentage range. The segment was impacted by decreased core sales in the genomics consumables business, primarily in North America, as well as declines in protein consumables and flow cytometry and lab automation solutions businesses. While there was "continued positive momentum" in next-generation sequencing products, that momentum was "more than offset" by weaker demand for plasmids and mRNA products, Blair said.
He said that the company expects the US government and academic end markets to "continue to soften" in light of Trump's cuts to life sciences research but that the impact will be offset by the strength Danaher is seeing in its bioprocessing business. In addition, the Life Sciences business finished the quarter "modestly better than anticipated" and market conditions outside of government and academia, such as pharmaceutical, clinical, and applied markets, are stable and "held up well globally," Blair said.
Meanwhile, revenues from the Diagnostics business decreased 3 percent to $2.45 billion from $2.53 billion a year ago, driven primarily by decreased core sales in China due to the country's volume-based procurement program and changes in healthcare reimbursement. Core revenues were down less than 2 percent year over year and clinical diagnostics core revenues were essentially flat. Outside of China, the segment saw growth in the mid-single-digit percentage range, with Beckman Coulter Diagnostics seeing growth in instruments and consumables.
McGrew said that the impact from VBP is "very much in line with what we thought."
Blair noted that despite the difficulties in Danaher's Diagnostics business in China, he believes that China will eventually become either the largest or second-largest diagnostics market in the world and that Danaher has "a real role to play there."
China "continues to be an attractive end market to us," he added. Besides the VBP and reimbursement impacts in the Diagnostics business in China, Blair said that bioprocessing and life sciences are both stable within the country. The Life Sciences business has also seen a boost from China's government stimulus funding, primarily within the instruments business.
Meantime, Cepheid's respiratory revenues exceeded expectations due to elevated levels of circulating respiratory illnesses and continued share gains, Blair said. The subsidiary also saw growth in the mid-teens in virology, while US revenues for Cepheid's multiplex vaginitis panel increased 40 percent.
The firm's Biotechnology segment revenues rose 6 percent to $1.61 billion in Q1 2025 from $1.52 billion in the year-ago quarter. Core revenues were up 7 percent in the segment. The segment saw increased core sales in the high-single-digit percentage range in the bioprocessing business and improved demand for consumables, partially offset by lower demand for equipment. Blair said the firm saw growth in the low-double-digit percentage range in consumables during the quarter with robust demand for commercialized therapies.
The company posted net earnings of $954 million, or $1.32 per share, in the recently completed quarter compared to net earnings of $1.09 billion, or $1.45 per share, in Q1 2024.
On a non-GAAP basis, EPS for Q1 2025 was $1.88 and beat the consensus Wall Street estimate of $1.64.
The firm finished the first quarter with $1.99 billion in cash and cash equivalents.
McGrew noted that this is a "really good time to do M&A" as valuations decline and Danaher has the "ability to be aggressive" in pursuing other assets.
Danaher expects non-GAAP core revenue for the second quarter of 2025 to increase in the low-single-digit percent range. For the full year, total core revenue is expected to grow approximately 3 percent on a non-GAAP basis. The company said it anticipates diluted net earnings per share for the year to range between $7.60 and $7.75.
McGrew said that the firm assumes a lower volume of respiratory testing at Cepheid in the second quarter that will contribute to anticipated lower growth in the quarter.
In afternoon trading on the New York Stock Exchange on Wednesday, Danaher's shares were up 5 percent at $194.37.