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Danaher Q2 Revenues Rise 10 Percent, Beating Analyst Estimates

NEW YORK (GenomeWeb) – Danaher today reported that total sales for the second quarter rose 10 percent year over year and beat the consensus Wall Street estimate. 

For the three months ending June 29, the Washington, DC-based conglomerate posted $4.98 billion in sales, up from $4.51 billion in Q2 2017. Analysts' average sales estimate was $4.92 billion. 

Organically, sales were up 6 percent year over year. 

Revenues in the Life Sciences segment increased 17 percent year over year to $1.61 billion from $1.38 billion, according to a Form 10-Q filed with the US Securities and Exchange Commission. Organic growth was almost 8 percent for the segment. 

On a conference call following the release of the Q2 financial results, Danaher CEO Thomas Joyce said that Beckman Coulter Life Sciences' core revenues grew in the high-single digits year over year "with broad-based strength across product lines and regions." He added that that business benefitted from new product introductions such as the Cytoflex LX flow cytometer and Biomek i-Series liquid handlers. 

Meantime, organic revenues in Sciex grew in the high-single digits with strength in North America and China, driven by pharma and clinical testing markets, Joyce said, and the recently acquired Integrated DNA Technologies business was up in the double digits.  

"The performance at IDT has been terrific thus far," Joyce said, adding Danaher sees multiple opportunities to improve the performance in that business and expand it, especially geographically. 

In the Diagnostics segment, revenues increased 8 percent to $1.55 billion from $1.44 billion, with core revenues up 5 percent. 

Beckman Coulter's core diagnostics business improved in the low-single digits, with the high-growth markets – high burden developing countries (HBDC) – pacing growth. The immunoassay and clinical chemistry businesses continued to "perform well," Joyce said. 

He also noted new product launches, such as the DxH 520 hematology analyzer for low-volume testing, and the DxH 900 hematology analyzer for high-volume testing. "These new analyzers are faster and easy to use with a much smaller footprint … [and] are important additions to enhance Beckman's competitive position in the diagnostics market," he said. 

Also in the Diagnostics segment, Cepheid grew in the high-single digits year over year, which Joyce acknowledged is slower growth than in recent quarters. He attributed the lower trend line to tougher year-over-year comparisons in the high-growth markets, though in Q3 Danaher expects a return to 10 percent or better year-over-year revenue growth.  

Danaher CFO Dan Comas added on the call that excluding the HBDC markets, Cepheid's revenues were up in the mid-teens year over year in Q2. 

In Danaher's other segments, revenues for the Dental segment were up 4 percent to $733.4 million from $702.6 million and Environmental & Applied Solutions revenues grew 11 percent to $1.09 billion from $983.4 million. 

Danaher also said today that it plans to spin off its Dental segment into an independent, publicly traded company. The transaction is expected to be completed in the second half of 2019. 

Danaher's R&D costs increased 10 percent year over year to $311.7 million from $283.3 million, while its SG&A spending grew 8 percent to $1.64 billion from $1.52 billion. 

Danaher posted a profit of $673.8 million, or $.95 per share, compared to a profit of $557.3 million, or $.79 per share, in the year-ago period. Adjusted EPS was $1.15 and beat the consensus Wall Street estimate of $1.09. 

Danaher finished the quarter with $904 million in cash and cash equivalents. 

The company expects EPS for the third quarter to be in the range of $.85 to $.88 and adjusted EPS to be in the range of $1.05 to $1.08. 

The full-year 2018 EPS guidance was changed to a new range of $3.64 to $3.71, compared to a previous range of $3.62 to $3.69. Adjusted EPS guidance was also tweaked to a new range of $4.43 to $4.50. The company previously guided to a range of $4.38 to $4.45. 

In Thursday morning trading on the Nasdaq, Danaher's shares were up 5 percent at $103.83.

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