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Danaher Q1 Revenues Grow 12 Percent

NEW YORK (GenomeWeb) – Danaher today reported a 12 percent year-over-year bump-up in its first quarter revenues, paced by its Diagnostics segment, which grew 14 percent.

For the three months ended March 31, total revenues reached $4.70 billion, up from $4.21 billion in Q1 2017 and above the consensus Wall Street estimate of $4.54 billion. Core revenues were up almost 6 percent year over year, Danaher President and CEO Thomas Joyce said on a conference call following the earnings release. The impact of currency translation added 5 percentage points to growth, while acquisitions added 1 percentage point.

The Washington-based conglomerate's Diagnostics business, its largest segment by revenues, grew to $1.52 billion in the recently completed quarter, compared to $1.33 billion a year ago. Core revenue growth was more than 9 percent.

Joyce said on the call that Beckman Coulter's diagnostics core revenues were up in the low-single digits, and growth was seen in immunoassays, clinical chemistry, and urinalysis.

He said that Cepheid's core revenues grew more than 40 percent year over year. He cited the company's expanded test menu, commercial execution, and the flu season as drivers for the improvement.

In January, the US Food and Drug Administration cleared the Xpert Xpress Flu test, which has also been CLIA-waived. The CLIA waiver, Joyce said, has expanded accessibility to the molecular test to more care settings, such as a physician office lab and local clinics.

"By bringing critical testing closer to the patient, Cepheid provides a more convenient and comfortable patient experience without compromising testing accuracy," he said.

The flu season, he added, was an important growth driver and minus the impact of flu, Cepheid core revenues would have grown in the mid-teens. Aside from seasonality effects, Joyce said that new customers have adopted Cepheid's molecular flu test, and "that we took share associated with flu. That bodes well for continued growth over the years."

Meantime, the Life Sciences segment revenues rose 13 percent year over year to $1.48 billion from $1.31 billion. Core growth was almost 6 percent, Joyce said.

Beckman Coulter's core life science business grew in the double digits "with positive performance across all major product lines and regions," he said, while Sciex grew in the high-single digits.

Joyce also said that the company closed its acquisition of Integrated DNA Technologies last week and added that the price tag for the deal was approximately $2 billion.

He noted that the genomics reagents business, in which IDT plays, is a $3 billion market with double-digit annual growth. IDT has grown in the mid-teens over the past several years, and experienced "really strong gross margins" above 60 percent.

"IDT really brings to our life science platform a position in high-value consumables with a tremendous commercial front end that has delivered consistent performance over a long period of time," Joyce said. He added that there are opportunities for Danaher to add incremental value to the business by expanding IDT's reach geographically and to improve that firm's operations via Danaher's broad operational philosophy known as the Danaher Business System.

Among Danaher's other segments, Dental revenues were up 3 percent year over year to $672.6 million from $655.5 million, while Environmental and Applied Solutions grew 13 percent to $1.03 billion from $914.8 million.

Danaher's R&D costs increased 12 percent to $298.7 million in Q1 2018 from $267.4 million in Q1 2017, while its SG&A spending ticked up 10 percent to $1.60 billion from $1.45 billion.

The company posted a profit of $566.6 million, or $.80 per share, in Q1 2018, compared to a profit of $506.1 million, or $.72 per share, in the year-ago period.

On a non-GAAP basis, its EPS was $.99, beating the analysts' average estimate of $.94.

Danaher finished the first quarter with $1.05 billion in cash and cash equivalents. 

For the second quarter, Danaher said that EPS is expected to be in the range of $.88 to $.91. On a non-GAAP basis, it anticipates EPS of $1.07 to $1.10.

For full-year 2018, the company anticipates an EPS range of $3.62 to $3.69, or $4.38 to $4.45 on a non-GAAP basis.

In early afternoon trading on the New York Stock Exchange, Danaher's shares were down about 1 percent to $101.10.