Danaher Q1 Revenues Up 58 Percent

Danaher reported on Thursday a 58 percent year over year increase in total revenues driven by its Life Sciences revenues, which more than doubled.

For the three months ending April 2, total revenues were $6.86 billion compared to $4.34 billion in the year-ago period. It beat the analysts' average estimate of $6.26 billion and was slightly above the company's expected results announced earlier this month.

Core revenue growth was 30 percent year over year including Cytiva, which the Washington D.C.-based conglomerate acquired last year.

Revenue growth in Danaher's Life Sciences segment, the largest of its three segments, grew 115 percent to $3.55 billion in Q1 2021 from $1.65 billion in Q1 2020, according to the company's Form 10-Q filed with the US Securities and Exchange Commission. The underlying biopharmaceutical business grew in the low 20 percent range, excluding COVID-19 revenues, Rainer Blair, president and CEO of Danaher, said on a conference call to discuss the firm's results.

Within the COVID-19 space, the significant ramp-up of vaccines and therapeutics has driven record bioprocessing demand, he added.

Meanwhile, the Diagnostics business increased 34 percent year over year to $2.18 billion from $1.63 billion. Danaher subsidiary Cepheid's core revenues grew more than 90 percent due to an "unprecedented demand" for rapid point-of-care testing for COVID-19, Blair said. In the first quarter of 2021, Cepheid shipped 10 million test cartridges — half were for its COVID-19 test and half for its four-in-one respiratory panel, which detects COVID-19, influenza A/B, and respiratory syncytial virus, he added.

The firm expects to ship 45 million tests in 2021, compared to prior estimates of 36 million tests.

Blair also noted that Cepheid saw increasing demand for its nonrespiratory tests, including tests for sexual health and hospital-acquired infections. Patient volumes at hospital and reference labs have been at or near pre-pandemic levels in most geographic regions, Blair said.

Total revenue related to COVID-19 is expected to be around $4 billion for full-year 2021, said Matt McGrew, executive VP and CFO of Danaher.

Revenues for Danaher's third segment, Environmental & Applied Solutions, increased 6 percent to $1.13 billion from $1.07 billion.

Across the business, Blair said, customer activity is now approaching pre-pandemic levels, particularly in China, where customer activity is "largely back to normal." Although the US is not all the way back to pre-pandemic levels, Blair said it is "moving in the right direction" and noted that the increase in vaccination rates in the country is driving some progress.

In Q1, Danaher's R&D spending grew 32 percent to $380 million from $287 million. Its SG&A costs grew 29 percent to $1.88 billion from $1.46 billion.

The company posted net earnings of $1.70 billion, or $2.29 per share, in the recently completed quarter compared to net earnings of $595 million, or $.81 per share, in Q1 2020.

On a non-GAAP basis, EPS for Q1 2021 was $2.52 and beat the consensus Wall Street estimate of $1.75.

The firm finished the quarter with $6.33 billion in cash and cash equivalents.

Danaher expects non-GAAP core revenue growth for the second quarter of 2021 to be in the mid-20 percent range, with full-year 2021 core revenue growth, including Cytiva, in the high teens on a non-GAAP basis.