Danaher Reports Q1 2024 Revenue of $5.796 Billion Amid Challenging Market Conditions

Apr 26, 2024 10:45 CST Updated 10:45

Danaher

Product Design and Manufacturer

Cepheid

Molecular Diagnostics Product Developer

Cytiva

Cell and Gene Therapy CDMO

With Views, With Attitude

This is the Life Science Industry Observer Official Account's Issue #991-3Issue Article

Source: Follow the Cause

Danaher Corporation has always been a giant in the life science/diagnostics field, with numerous subsidiaries.

Including Cytiva (acquired from GE), IDT, Beckman, Leica, Abcam, Cepheid, and a series of other companies, they form a vast empire with an annual revenue exceeding $24 billion.

It is very difficult to analyze such a behemoth, and we can only scratch the surface. Every company inside is worth studying carefully.

However, one drawback of large holding groups is that they can obscure the subtle performance of their components.

Then let's take a rough look.

Hard to stabilize

On March 29, 2024, Danaher Corporation released its Q1 2024 earnings report.

The financial report shows that the company's revenue in Q1 2024 was $5.796 billion, a year-on-year decrease of 2.57%.

Net profit of $1.088 billion in Q1 2024, a year-on-year decrease of 24.97%.

Among them,The "main culprit" behind the revenue decline, BioScience (also known as Cytiva), saw its revenue drop 13.36% quarter-over-quarter and 18.24% year-over-year.

Helping Danaher stabilize was the Diagnostic segment, with revenue of $2.527 billion this quarter, a year-over-year increase of 6.36%.

According to the information it disclosed,Revenue from Cepheid achieved double-digit growth, with respiratory testing business exceeding the expected $575 million to reach $675 million.

Life Sciences Business Group revenue was $1.745 billion, a year-over-year increase of 2.11%.

From the trend,In the whole year of 2023, except for growth in Q4, all other quarters saw a decline (note that the former Applied Sciences division has been excluded).

What everyone is worried about is also Danaher's re-entry into a downturn.

In fact, it's not much better.

So you think Danaher is going to plummet?

On the contrary, it is on a strong upward trend...

There are actually many reasons to be found.

For example, Danaher's EPS (Earnings Per Share) for Q1 2024 was $1.92, surpassing the previous analyst estimate of $1.72.

For instance, companies of the same type are not expected to perform well.

For instance, the overall environment is like this, and no one can remain unaffected.

....

In summary, don't invest in stocks...

Of course, we still need to pay attention to the performance of each specific sector.

Hidden in the Details: China

The biotechnology division (Cytiva) performed poorly, even falling completely below the lowest point of the entire year of 2023, with revenue of only $1.524 billion, a year-on-year decrease of 18.24% and a quarter-on-quarter decline of 13.36%.

From a regional perspective, apart from these other developed areas, there isn't a single "good piece of meat."

Cytiva's global sales have seen a double-digit percentage decline year-over-year.Even the main base in the United States has fallen.。

This shows either the company has completely collapsed, or there has been a significant decline in demand from its client base (biomedical).

Among these, how did China perform, which we are most concerned about?

According to the disclosure by CEO Rainer Blair during the earnings call, Biotechnology segment sales in China dropped 40% in Q1 2024.

Mourning for the Chinese team, although most of the reasons may not be on the team...

Let's take a look at the Life Science division.

2024Q1 Life Sciences Business Group Revenue 1.745 Billion USD, a Slight Year-over-Year Increase of 2.11%.

Regionally,Once again, the so-called high-growth markets performed the worst.

Similarly, the performance of China in our focus is worrying.

The CEO stated that China Life Sciences' revenue declined by a high double-digit percentage, meaning a decline of more than 10%.

Stable enough to break one's heart...

An analyst asked,Will the IDT of the Life Sciences division be affected by the U.S. Biosecurity Act? The CEO stated that IDT's business in China accounts for a relatively low proportion...

As we mentioned earlier, Danaher's Diagnostics segment has shown the most stable performance.

Diagnostic Business Group Revenue in Q1 2024 was $2.527 billion, a year-over-year increase of 6.36%.

Its poorly performing region was replaced by other developed markets (Other developed markets), namely Japan, with a year-on-year decline of 15.38%.

China saw a low single-digit decline, which is less than -5%.

Finally, I got one less blow.

The Future - The Mountain Is There

Thermo Fisher|Achieving this year's performance target is a victory

When analyzing Thermo Fisher's 2023 financial report, we can already see the current industry trend: slowed expansion and reduced investment have become the new normal.

And the disruption caused by geopolitical uncertainty to economic activities is still ongoing, even a giant as strong as Danaher has had to adopt so-called "de-risk" strategies.

That is, by seeking to reduce reliance on enterprises in the China region to enhance risk resistance capabilities.

Specifically, in the China region, the pressure of cost control has also made the giants feel the chill.

So, how will this industry unfold the story of its own development in the future?

Will investors abandon Danaher due to various risks?

Judging from the performance of the stock price, it seems not.

A simple truth is that, whether you see it or not, the mountain is there.

Only by climbing over the valley of despair can one reach the summit and overlook the lesser peaks.

There is no way to avoid it.

This is true for Danaher, and it is also true for life science/diagnostic companies in China.

Danaher's revenue guidance for 2024 remains a low single-digit decline, and we have not made any further projections.

When will there be a Danaher in China?

---The End---

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