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Danaher Q4 Revenues Rise 21 Percent

NEW YORK – Danaher reported on Thursday a 21 percent year-over-year increase in total sales for the fourth quarter, beating the consensus Wall Street estimate.

For the three months ended Dec. 31, the Washington, D.C.-based conglomerate posted $8.15 billion in total sales compared to $6.76 billion in the year-ago period. The analysts' average estimate was $7.92 billion.

The results are in line with the firm's preliminary results announced earlier this month.

Core revenues, including Cytiva, grew at nearly 20 percent, the company said. On a conference call to discuss the financial results, Danaher CEO Rainer Blair said the base business was up approximately 10 percent during the quarter.

By sector, Life Sciences grew 21 percent year over year to $4.05 billion from $3.36 billion, while Diagnostics rose 29 percent to $2.88 billion from $2.23 billion. Environmental and Applied Solutions increased 4 percent to $1.22 billion from $1.17 billion.

Blair said that patient and testing volumes for the Diagnostics segment in the fourth quarter were at or near pre-pandemic levels. He added that Cepheid has seen an acceleration in demand not only for respiratory testing, but also in sexual health, virology, and hospital-acquired infection testing. Cepheid shipped $19 million in respiratory tests during Q4 and provided 60 million respiratory tests in 2021 – 10 times the number of tests shipped in 2019, Blair said. Fifty percent of the tests shipped in Q4 were Cepheid's 4-in-1 combination respiratory test, while the other 50 percent were its COVID-19-only test, he said.

Danaher's R&D costs in Q4 2021 grew 25 percent to $495 million from $396 million in Q4 2020, while its SG&A costs increased 17 percent to $2.29 billion from $1.96 billion.

Net earnings were $1.79 billion, or $2.39 per share, in the recently completed quarter compared to $1.24 billion, or $1.66 per share, a year ago. Non-GAAP EPS for Q4 2021 was $2.69, beating the consensus Wall Street estimate of $2.54.

For full-year 2021, Danaher's revenues increased 32 percent year over year to $29.45 billion from $22.28 billion in 2020. It slightly beat analysts' average estimate of $29.13 billion. Core revenues,including Cytiva, grew 25 percent, Danaher said.

Life Sciences revenues improved 41 percent to $14.96 billion from $10.58 billion. Diagnostic revenues grew 33 percent to $9.84 billion from $7.40 billion, and Environmental and Applied Solutions revenues increased 8 percent to $4.65 billion from $4.31 billion. 

In 2021, Cepheid more than doubled its production capacity for respiratory tests, Blair said.

Patient volumes in the clinical diagnostics arena are at or near pre-pandemic levels, he noted, although Danaher has seen "modest disruptions" in certain regions, including parts of China and Europe, as a result of the pandemic.

In the molecular diagnostics space, the demand for Cepheid's point-of-care respiratory tests has been heightened by both the Omicron variant and a more active respiratory season in the Northern hemisphere, a trend Blair said the company expects to continue. The respiratory season has driven preference for the 4-in-1 respiratory panel, he added.

Cepheid anticipates shipping the same number of respiratory tests in the first quarter of 2022 as it did in Q4 and is predicting 50 million respiratory tests for all of 2022, Blair said.

During the year, Cepheid placed 10,000 new GeneXpert instruments, reaching a total installed base of more than 40,000 instruments, Blair said. He added that, assuming the COVID-19 pandemic turns endemic, the point-of-care respiratory market will expand significantly compared to before the pandemic and that Cepheid will continue to gain market share.

Danaher's R&D spending for 2021 was up 29 percent year over year to $1.74 billion from $1.35 billion, and its SG&A costs grew 19 percent to $8.20 billion from $6.90 billion.

Blair said in a statement that the firm deployed $11 billion on strategic acquisitions during the year. In September, Danaher completed its $9.6 billion acquisition of Aldevron, a manufacturer of plasmid DNA, mRNA, and proteins for biotechnology and pharmaceutical customers in research, clinical, and commercial applications.

The firm posted net earnings of $6.43 billion, or $8.50 per share, in 2021 compared to $3.65 billion, or $4.89 per share, in 2020. Non-GAAP EPS for 2021 was $10.05 and beat the consensus Wall Street estimate of $9.88.

The company ended the year with $2.59 billion in cash and cash equivalents.

Blair noted on the call that the firm has returned to pre-pandemic order levels and has not seen widespread declines in that activity despite some countries implementing lockdowns due to the COVID-19 pandemic. While the company is "not immune" to supply chain challenges and inflationary pressures affecting other businesses, Blair said Danaher is "proactively addressing" those issues.

For both the first quarter and full year of 2022, Danaher forecasted non-GAAP core revenue growth in the base business in the high single digits, including the impact of COVID-19 vaccine and therapeutic-related revenues and excluding the impact of COVID-19 testing revenue.