Danaher Corporation (DHR) on Q1 2021 Results - Earnings Call Transcript

Operator: My name is Lori, and I'll be your conference facilitator this morning. At this time, I would like to welcome everyone to Danaher Corporation's First Quarter 2021 Earnings Results Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now turn the call over to Mr. Matt Gugino, Vice President of Investor Relations. Mr. Gugino, you may begin your conference. Matt Gugino: Thanks, Lori. Good morning, everyone, and thanks for joining us on the call. With us today are Rainer Blair, our President and Chief Executive Officer; and Matt McGrew, our Executive Vice President and Chief Financial Officer. Rainer Blair: Well, thanks, Matt, and good morning, everyone. In the first quarter of 2021, we got off to a very strong start, delivering better-than-expected core revenue growth across our portfolio. Our broad-based performance was driven by double-digit core revenue growth in our base business, our ongoing contributions to the development and production of COVID-19 vaccines and therapeutics and strong demand for Cepheid's point-of-care molecular diagnostic tests. Our record top line performance also contributed to outstanding earnings per share growth and free cash flow generation. Matt Gugino: Thanks, Rainer. That concludes our formal comments. Lori, we're now ready for questions. Operator: Thank you. Our first question comes from the line of Tycho Peterson of JPMorgan. Tycho Peterson: Hey, good morning. Rainer Blair: Good morning, Tycho. Tycho Peterson: I'll start with bioprocess. Obviously, very strong numbers there. Did you give the Pall, Cytiva order number? I didn't hear that, if you did. And then as we kind of think about the durability of the trends there, I appreciate your kind of raising guidance here for both the vaccine and the testing tailwinds. But how do you think about kind of the durability? And then also, was there any stockpiling? We've heard from one of your peers about customers building inventory given supply chain concerns? Thanks. Rainer Blair: Thanks, Tycho. So as it relates to orders growth for our vaccines and therapeutics businesses we're talking primarily here, Cepheid and - I'm sorry, Cytiva and Pall Biotech, first quarter orders growth was over 60%, just to give you a sense of the strength of that. And as we look towards the rest of the year here, you heard us talk about the fact that we're confident now that our total business for the vaccine and therapeutics for 2021 will be $2 billion rather than the originally estimated $1.3 billion. So we continue to see that order build here, as noted here in the first quarter, and that's really continuing to drive strength here for the full year. Now as it relates to stockpiling, we occasionally hear about that on certain and limited products. But in general, and certainly, as we run our business, we're in constant communication, both with our customers and our suppliers to ensure that we don't have pockets of inventory, either a finished product or raw materials sitting idly by holding up any manufacturing of vaccine or therapeutics. Tycho Peterson: Okay. That's helpful. And then maybe a follow-up on margins. Obviously, good upside here as well. In particular, on the Life Science side, you had 24% last quarter, now you're 33%. Can you maybe just talk to how you think about the durability of that margin improvement? Rainer Blair: Well, certainly, the volume ramp here has given us a great deal of volume leverage. And we also, of course, see through the increased consumption of our consumables, a skew in the mix towards the positive. So the margins are very strong. And as we look forward and the comps change and we continue to invest in our businesses, as well as we expect some costs to come back as we get to a more normalized travel situation, I would expect those margins to moderate a little bit. Tycho Peterson: Okay. And then before I hop off, just one last one on capital deployment. You mentioned the bolt-ons for IDT and Cytiva. Obviously, we're seeing M&A pick up in the space more broadly. Just curious your thoughts on the landscape appetite for something more meaningful? Rainer Blair: We continue to be excited about our balance sheet and how quickly we've been able to rebuild that. Now having said that, it's just a year ago that we actually closed the Cytiva acquisition, and there's certainly plenty of work to do there. But having said that, our funnels are very active across all four of our platforms, and we think that we have plenty of opportunity ahead of us. Matt McGrew: Tycho, its Matt. I just want to get - kind of going back to your first question, just to give you some numbers around sort of the order growth. You had asked about sort of, I think, kind of the continuation of it. Maybe the way to think about it, at least how I think about it is in - for Pall and Cytiva in the vaccine and therapeutics, we did, call it, $500 million in Q1. I think that's going to be pretty consistent here, Q2, 3 and 4. So I think we'll probably do $2 billion for the full year in the vaccines and therapeutics, which will be, like I said, pretty consistent. And then I think when you think about maybe sort of the rest of it, the Cepheid part, that's going to ramp up as we go through the year, given the fact that we've talked about we're going to be doing a little bit more kind of volume here than we initially thought. So that's probably another $2 billion revenue. So total revenue, $4 billion for kind of that COVID tailwind. And one piece, the Cepheid piece will ramp up and the other piece, the vaccine and therapeutics, pretty steady through the year. Tycho Peterson: Okay. That's helpful. Should we assume some of that vaccine work also spills over into 2022? I know it's only the first quarter of '21, but that's the obvious question we're all going to get is what we set up for 2022 looks like? Rainer Blair: Yeah. So I think the way we're thinking about that is that we continue to build and ramp on orders growth here. And after the $2 billion, again, vaccine and therapeutics, we expect to have $1 billion of backlog vaccine and therapeutics going into 2022. And that's assuming, right now, with the approved vaccines that are in the various jurisdictions, which are eight currently. So that's the assumption there. And that's not assuming any booster shots or vaccinations of kids under 16. So we do expect to see further vaccine and therapeutic production well into 2022. Matt McGrew: Yes maybe, Tycho, a simple frame on the numbers of that, too, just to kind of give you a sense of it because I know Rainer mentioned it was $1 billion backlog. But the way that I think I'd frame it is, if you think about '20 and '21, we're probably going to see orders of, call it, 3.6, 3.7 billion cumulatively. I think we did $650 million in sales last year. We think we're going to do $2 billion in sales this year. So that $3.6 less, call it, $2.6 billion in sales is why we end up with a backlog at December of this year to take into '22. And like Rainer said, that really sort of doesn't kind of - that's just where we stand today with the assumption, as Rainer mentioned, that we are not really assuming kind of a fall booster/third shot. We're not assuming that vaccines are going to be out there for kids at this point either. So that's really just what's on the market now, the eight that are cleared and the ramp that we're seeing here in the developed markets largely. Tycho Peterson: Okay. Very helpful. Thanks, guys. I’ll let others jump in. Rainer Blair: Thanks. Operator: Your next question comes from the line of Vijay Kumar of Evercore ISI. Rainer Blair: Hi, Vijay. Vijay Kumar: Hi, Rainer. Congrats on a pretty solid print this morning. Just to follow up on that last question. I appreciate all the color. So you guys did $650 million of revenues, vaccine and therapeutics in 2020, cumulative of, call it, $2.6, $2.7 in 2020 and '21. And that does not include children or booster. Just assuming booster, I think most people are leaning towards a third shot. Given that we've recognized about $2.7, a booster third shot would imply another $1.3, like half of the $2.7 as potential incremental perhaps in 2022. Would that math make sense? I'm curious. Matt McGrew: Yeah. I mean Vijay, I think it's a little early to tell. I mean I think you're right in the assumption that most people, I think, are assuming there's a third shot or a booster. But again, I think it's - the timing and the amount and what it looks like is just a little early to tell. So that's why we sort of wanted to kind of give you what we're seeing now, the framework that doesn't really include it because that's still a bit of an unknown, but just so that you know sort of how we're thinking about where we stand here early - still pretty early in '21. But as that plays out maybe in the second half and in '22, kind of give you an update, but that is not inclusive of the numbers that I just laid out for you. Vijay Kumar: Understood. And then I did have one follow-up on how to frame what the future could look like. And I'm not asking for guidance in fiscal '22. It's more perhaps broad strokes. And I think the debate has been for some of your peers with the exposure to COVID tailwinds. The debate has been whether companies can grow earnings in '22. I think you guys could end up being one of the few companies that can grow earnings off of fiscal '21 levels. I think Rainer, some of your comments on gaining share in biopharma. And you alluded to the fact, Cepheid, really strong demand. It looks like that increased installed base should flow through to other tests in post-pandemic. Am I right in thinking about some of those broad strokes about '22 earnings being above '21? Rainer Blair: So Vijay, let me lay out how we're thinking about '22 on the back of '21. And as Matt was just saying, it's a little early to get into specific specifics, as you can imagine. 2022 in this dynamic environment is a ways away. But having said that, we feel confident around the durability of our COVID revenues. So let me try and lay this out a little bit. As I mentioned, we think we entered 2022 with $1 billion in vaccine and therapeutic backlog. And the potential upside that we talked about based on the assumptions, not including boosters, not including kids being vaccinated, nor including at this point, other vaccine programs that might be earlier stage in the pipeline. If you think about that in our very, very broad portfolio, both in terms of upstream and downstream solutions, independent of the vaccine or therapeutic modality, we really see that we're very well positioned there. And that $1 billion backlog is sort of the beginning of that story. Now as we think about testing, so diagnostic testing for COVID, COVID is going to be or is already endemic, and we'll be testing at the point of care for a long time. And so while some folks are talking about 2021 being a peak year for testing for the market, we think Cepheid is uniquely positioned. You recall my example of the concentric circles with the highest durability tests being in the center, representing really Cepheid's point-of-care workflow. And as you think about Cepheid expanded installed base, the very strong menu that we have, we believe that we'll do roughly the same number of tests in 2022 as we are doing in 2021. And you'll recall, we just raised that from 36 million to 45 million tests. And then if you think about our base business, here, we really are and continue to be exposed to a number of attractive secular growth drivers. Biologics, more generally in life science research, along with molecular diagnostics and the decentralization of health care. And then, of course, environmental sustainability as you think about our water quality group and packaging needs continue to proliferate. So net-net, we feel we're uniquely positioned to outperform in 2021 and beyond. Vijay Kumar: Well, that is impressive. Thanks for the comments, guys. Congrats. Operator: Your next question comes from the line of Doug Schenkel of Cowen. Rainer Blair: Hi, Doug. Doug Schenkel: Hey. Good morning, guys. Thank you for taking my questions. I just want to go back to guidance. And I think it's a math question. I'm just wondering if you could help us bridge essentially the delta between your prior core revenue growth guidance for low double digits and the updated range of high-teens growth? More specifically, I'm wondering where you're seeing the most improvement from a business perspective relative to where we were at your last update. And along those lines, what are you now assuming for the core operating environment, particularly as we look ahead to the second half of the year? Rainer Blair: Sure, Doug. So let's come back to the full year guide going from mid to high teens. And a simple frame if we start at the top there would be that we see the full year base business now at high single-digit core growth and full year COVID tailwinds to be in the high single, low double digits. Now if we start with the base business, we see that sustaining certainly at the current levels with customer activity around the world continuing to resume and approaching pre-pandemic levels. And then, of course, customers are adapting to this new work environment, and we see that in the form of strong sales funnels and our order book growth. Even service levels are at or near normal as we have much better site access than we have had for more normalized operation. And we're also seeing an uptick in instrument revenue as customers are starting to initiate new projects, upgrading and doing some capital investments. Now as I've mentioned here just a minute ago, from a COVID testing perspective, we still see the point-of-care testing at Cepheid easy workflow, the right answer being in short turnaround being the solution, the durable solution. And we see Cepheid actually accelerating here to 45 million tests versus the 36 million tests that we've spoken about. So we're seeing no falloff in demand for Cepheid tests. And the way to think about that is we did about 10 million here in Q1 and expect to increase by one million about each quarter. So 11 million in Q2, 12 million in Q3 and 13 million in Q4. And an important point to recognize here is our mix in Q1, COVID only versus foreign one was 50-50. Now as we go into the summer months here in the Northern Hemisphere, we see that mix going from 50-50 in Q1 to 80-20, 80 COVID, only 20 for 1 for Q2 and Q3. And then for Q4, we see that going back to - as we enter flu season and so forth, back to 50-50. So keep that in mind from a mix assumption perspective. Now if you look at this by segment, we see the Life Sciences growing over 20% here for the full year. Of course, bioprocessing that's non-COVID related, remains robust in the low double digits. As we've talked about, we're seeing our instruments improving. So if you think of like a microsystem, think about SCIEX, trends improved through 2021 as these projects are resuming as we speak and return to work. And then of course, the COVID-related vaccine and therapeutics revenues we just talked about of about $2 billion. As you think about Diagnostics, here, we see ourselves in the high teens. Point of care, I talked about the expected 45 million tests at Cepheid as that capacity continues to build here through the year. And in our core and reference lab businesses, we see the volumes continuing to recover and the lockdown is really not having a material impact. So thinking about Beckman Diagnostics, Leica Biosystems in the low double digits here for the full year. And then from an EAS perspective, we see that in the mid single to high single digits as the consumables demand remains solid as it has been, but now we're starting to see equipment placements improving as well and in positive growth territories. And then lastly, if you build it out by geography, China, up over 20% for the year with a very strong recovery. North America, also in high teens, with Western Europe at low double digits. So that's how we're thinking about the frame here, by business as well as by geography, as well as base and COVID tailwind. Hopefully, that helps with that. Doug Schenkel: Yes. That is super helpful, and that's a lot of great detail. Maybe a very quick follow-up. And I think you sort of alluded to this or referred to this at the end, Rainer. But in terms of just high growth markets, growth was extremely strong in the first quarter. Some of that, I think, was just fundamental improvement. Some of that was favorable comps. But just kind of your last point, it does sound like you're expecting some sustained improvement in high growth market growth over the balance of the year, that kind of what we saw in Q1 is expected to be sustainable. Rainer Blair: We do. As you correctly point out, China, in particular, Q1 last year essentially was shut down. So the first quarter numbers we're very, very high. But having said that, not only in the market but also in our businesses, we see sustained, very strong growth in the high-growth markets, China being the best example of that with growth over 20% for the full year. Doug Schenkel: Great. okay. Thank you, again. Rainer Blair: Thanks, Doug. Operator: Our next question comes from the line of Scott Davis of Melius Research. Rainer Blair: Hi, Scott. Scott Davis: Good morning, Rainer and Matt. And Matt, good morning. Yes. Can you hear me, guys? Rainer Blair: Yes. Matt McGrew: Yes, we can hear you. You're good. Scott Davis: Okay. Okay. Good. I have a new headset, so I'm not sure if it works or not. So hopefully, it works. But anyways, Rainer, you talked a little bit about the capacity adds. Can you give us a little sense of the kind of the scope, how - I mean, you're talking about adding new lines in existing facilities? Are you talking about new facilities? And are you in process on this? Or is it done? Just a little bit of color around that would be helpful. Rainer Blair: So we are talking about all of that, Scott. We are opening up new facilities. For example, we're starting up a new plant in South Carolina. That will be targeted initially at single-use technologies, will be coming online, supporting both Pall Biotech as well as Cytiva. We've recently completed a small deal in China, buying out our joint venture partner and are expanding our single-use technology capacities on the ground in China as well. And then we have additional lines going in, in several facilities throughout the developed market. Once again, for single-use technologies, but also other biopharma-related portfolio increases. So all of the above and coming online here in the shorter term. Scott Davis: Now to the 40% incrementals that you're guiding to, which obviously seems conservative based on your history, is the new capacity - I mean, it probably comes in at a fairly low profit level at first. Does that play into this guidance at all? Or is it not really a big issue? Matt McGrew: No, Scott. It's not a huge issue for us in this year. I mean a lot of the stuff, too, when you think about what's coming online, think about capacity at Cepheid, that's pretty good margin for us. So if anything, it's probably on the margin, helpful, but it won't be a big drag. Scott Davis: Okay. All right. Good luck, guys. Congrats on a great quarter. Matt McGrew: Thanks, Scott. Operator: Your next question comes from the line of Dan Brennan of UBS. Dan Brennan: Great. Thanks for the questions. And congrats on the quarter. Maybe a two parter on COVID. So it's interesting, the outlook for 2022 that Cepheid will remain consistent with '21. Can you just share some of your assumptions around that? Like what's kind of implied here are you thinking? And how are you thinking about the overall testing market that kind of gets you to that number? And then b, just on the vaccine therapeutics. I know kind of maybe dovetailing on kind of Scott's question in terms of capacity. Just what - can you share with us kind of where you are today from a total capacity in terms of being able to meet the demand that you see? How tight things are? And then as eventually COVID flows with the additional capacity building out, kind of how does that filter into the base bioproduction business? Rainer Blair: So let's start with COVID testing and the durability of that, Cepheid coming back really to what we're seeing today. We see no slowdown in the demand for Cepheid tests for COVID. So while the market, as I mentioned earlier, might peak this year in terms of testing, and we'll see if that's the case. But if we take that assumption, we continue to see that the value proposition that Cepheid offers at the point of care and as those tests wander from more distant testing setting back to the point of care that Cepheid's value proposition there in terms of workflow, speed and accuracy are really in the center of that concentric circle, and it's really - that's so important here to keep in mind. Also, we've increased the installed base of the gene experts now since the beginning of last year by over 40%. So a significant installed base increase. And that's actually the largest installed base of molecular diagnostics point-of-care test around the globe. At the same time, our broad menu, 30 tests approved outside the US, 20 inside of the US, is getting us into a care setting that we expect to provide strong durability here for the future. So that's what allows us here as we continue to increase capacity quarter-over-quarter to continue to increase our shipments. And as you think about 2022 going forward, first of all, the vaccines will take likely years to roll out to the entire world. Secondly, their effectiveness is on a continuum, some of them as high as 95%, others in the mid-60s. And so we're already seeing breakthrough infection. And there's also a number of people around the world who prefer not to get vaccinated. So testing will be continuing and very likely so at the point of care. And that just gives us the confidence based also on our conversations with our customers who are giving us outlook here for the next 18 to 24 months, that we're going to be able to maintain in 2022, the level of test shipment that we had here in 2021. So 45 million is what we're looking for, for 2021. Now as we think about - to your question on total capacity, is capacity tight? I think certainly, we are running very hard. But as I've mentioned in other settings, we have invested continuously here over the last 18 months in expanding our capacity. If we think about Cytiva in particular, even prior to the close with GE, we had an arrangement where we continued to increase capacity, and we've continued to invest very significantly in those capacity increases. So we're working together with our customers and our suppliers to make sure that we're able to supply the needs here in 2021 and going forward. Now to the other aspect of your question, once you have this capacity online, should vaccination and therapeutics peak, how do we think about that capacity going forward? And here, again, we're very bullish based on the development pipeline of biologic drugs, which continues to grow significantly. So even if you put COVID-related vaccines and therapeutics aside, the capacity requirements going forward continue to be significant. We're very confident that the capacity investments that we make today and tomorrow are very much needed here to supply the future needs of our customers. And they're certainly in dialogue with us specifically on that point. Dan Brennan: Sounds terrific, Rainer. Maybe just one quick follow-up. Just on Cepheid, I know it's been asked in the past, but we did, did a survey that showed there's likely to be a continued high usage level for a lot of these boxes that are placed. Just as we get beyond COVID, just any way to think about what Cepheid was like the growth rate you were thinking about before COVID and what that could be now given this dramatically larger installed base in the sense of how much of these boxes going to continue to get used beyond COVID? Thank you. Rainer Blair: Well, you've heard us speak about our frame of pre-pandemic and sort of post-herd immunity or post vaccination, where we saw Cepheid really growing in the low double digits pre-pandemic based on the menu at that time, which we've since expanded and will continue to expand going forward. And so the way we think about it is, at the very minimum, we should be able to drive continued low double-digit growth at Cepheid on the one hand. On the other hand, we do have now an endemic disease, COVID-19, and you really need to layer that type of testing on top of sort of this base testing rate that we have seen in the past. So that's how we're thinking about it, and that's what gives us confidence in the durability here, both in the near term and in the future. Dan Brennan: Great. Thank you, Rainer. Operator: Your next question comes from the line of Dan Leonard of Wells Fargo. Rainer Blair: Hi, Dan. Dan Leonard: Hello. So a few questions. First off, on the guidance, I appreciate all the line item detail. But at a high level, how much conservatism do you think is still baked into that high single-digit view on the base business outlook given all of your commentary in the low single-digit comp? Rainer Blair: So as we look at our base business, we really see this as an appropriate view of what remains here of the year, and there's good reason for that. We continue to see labs opening up, patient volumes return. In the base business, we see in our Environmental & Applied Solutions business activity levels continue to pick up with our consumables running at a good strong rate and instrument continuing to be placed here as capital project go forward. And this is why we've increased that forecast on the base business from mid single to high single digits, and we think that's appropriate. As we look for the year, we still have a good part of the year ahead of us and think that's the appropriate way to think about it. Dan Leonard: Okay. I appreciate that. And then my follow-up. How are you thinking about prospects for inflation and your ability to offset inflationary pressures, maybe even from incremental efficiencies you've learned from operating during a lockdown? Rainer Blair: We've been in these kinds of environments before, and the Danaher Business System and the tool set that we apply every day really helps us to offset this. On the one hand, we're working closely with our suppliers and ensuring that we are working our price performance variations and the tool sets that we have there. Of course, we value engineer every day of the week. And then going forward, we also work on the pricing side to ensure that we're able to protect our margins and ensure that we capture the value of our differentiated and oftentimes IP-protected solutions going forward. Dan Leonard: Appreciate that. Thank you. Rainer Blair: Thank you. Operator: We have time for one more question. Your final question will come from the line of Patrick Donnelly of Citi. Rainer Blair: Hi, Patrick. Patrick Donnelly: Great. Hey, how are you guys? Thanks. Rainer, you touched on it a little bit a couple of questions ago, but I wanted to drill in on the bioprocessing piece outside of the vaccine. Obviously, vaccine demand gets a lot on the headlines understandably. But can you just talk about what you're seeing in the market, kind of the underlying demand in the bioprocessing, bioproduction world? What do you think that market growth rate looks like over the next few years? And then to your point, how confident you are in that demand being enough to kind of fill the capacity that you're building out in the post-vaccine world, which, again, to your point, feels like it's multiple years away? But just wanted to talk about that market a little bit Rainer Blair: Sure, Patrick. There is a number of data points to consider here. Let me start with the fact that biologic drugs are highly efficacious and in very great demand, and that the penetration of these drugs throughout the world is still in the single-digit percentages, again, speaking now outside of COVID vaccine. So the penetration of these highly efficacious drug is still relatively low. On the other hand, when you look at the surge of capital investment that we see going into drug development, whether that be in traditional pharma or small biotech and throughout the world, we see that the drug pipeline and the associated number of drugs in the clinical - in clinical trials continues to ramp very significantly. And even if you apply sort of traditional success rates to the number of projects in those pipelines, you have to expect a very, very solid and continued growth here for the future, and we certainly do. And we expect that growth to be in the low double digits here on a sustained basis. And if you have any sort of additional leverage here as it relates to the transition from, for instance, stainless steel manufacturing solutions to single-use technologies for greater flexibility and ease of use and lower risk of cross-contamination, that provides additional impulses and catalysts to the growth rate, which will require the capacity that you see coming online. So we're very confident that the capacity that we're putting in place for our customers and to support their future growth is required here in the future. Patrick Donnelly: That's really helpful. I appreciate it. And then I just wanted to follow up on one of the cap deployment questions from earlier. We've seen some peers kind of step into other industries like the CRO world. I know you've talked a little bit about your interest or lack thereof in that type of space previously, but some thinking has evolved in other places. So I was wondering, is that a market that you'd be interested in getting into? And just wanted to get your thoughts on that. Rainer Blair: So we obviously don't want to comment on specific things happening here in the market. But what I can say is that we're really happy with the approach that we've taken with the acquisitions of Cytiva, Pall, IDT and Phenomenex. We're providing very specific practical and material solutions to our customer’s pain points. These are all companies that are in the forefront of technologies with proprietary solutions, with high number of touch points and high customer intimacy and very importantly, recurring revenue, which is exactly the kind of businesses that we want to be in. And once again, coming back to the nature of this industry, in this industry, more often than not, scientists are making - or at the very minimum, heavily influencing the purchasing decision as opposed to economic bundles really being a point of leverage. And why is that? Because the value in getting a, for instance, biologic drug to market faster by just one week, if it's a $1 billion drug a year, is $20 million. The value of increasing your yield by 2% to 5% is several tens of millions of dollars. So that's how we think about the fact that our strategy and the way we're focused is, is the way to be. Patrick Donnelly: Very helpful. Appreciate the color. Operator: Thank you. I will now return the call to Matt Gugino for any closing comments. Matt Gugino: Thanks, Lori, and thanks, everybody, for joining us today. We're around all day for questions. Operator: Thank you. That does conclude the Danaher Corporation's first quarter 2021 earnings results conference call. You may now disconnect.
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Danaher Corporation Reports Q3 Beat Above its Preannouncement

Danaher Corporation (NYSE:DHR) reported its Q3 results, with EPS of $2.56 coming in better than the Street estimate of $2.26. Revenue was $7.66 billion, compared to the Street estimate of $7.14 billion.

According to the analysts at RBC Capital, the beat above the company’s September 14 positive preannouncement was paced by broad portfolio strength and upside COVID test revenues. However, bioprocessing orders were down a disappointing 20% year-over-year, against tough comps.

For Q4/22, the company expects non-GAAP base business core revenue to be in the high-single-digit percent range. For fiscal 2022, the company raised its non-GAAP core revenue growth estimates to the high-single-digit percent range.

Danaher Corporation Reports Q3 Beat Above its Preannouncement

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According to the analysts at RBC Capital, the beat above the company’s September 14 positive preannouncement was paced by broad portfolio strength and upside COVID test revenues. However, bioprocessing orders were down a disappointing 20% year-over-year, against tough comps.

For Q4/22, the company expects non-GAAP base business core revenue to be in the high-single-digit percent range. For fiscal 2022, the company raised its non-GAAP core revenue growth estimates to the high-single-digit percent range.

Danaher Corporation’s Analyst Meeting Review

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Analysts at RBC Capital expect the company can over-deliver and orchestrate the separation earlier than the initial target. According to the analysts, the upside in Cepheid COVID testing revenues in Q3/22 was nice to see, and the new long-term targets look achievable to them, especially given underlying market growth in biologics and Danaher’s share gains.

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