Danaher Life Sciences Sales Up Double Digits

Danaher’s 11.5% revenue growth (see IBO 4/30/18), with core growth of 5.5%, for the first quarter, was led in part by 13.0% growth for the Life Sciences business. Life Sciences recorded 5.5% organic sales growth as acquisitions added 1.5% growth and currency effects added 6.0%. Recurring revenue represented 66% of Life Sciences sales. Beckman Life Sciences’ sales outpaced all other Life Sciences businesses, with a double-digit increase in core sales due to growth across all major product lines, notably flow cytometry and particle counting. SCIEX also recorded strong growth as revenues rose in the high single digits due to sales of the X500R QTOF MS system, as well as growth in Western Europe and China. Sales for SCIEX’s Phenomenex and Agela businesses generated nearly double-digit core revenue growth, up in the mid-single digits. Also within the Life Sciences unit, Pall revenue growth was fueled again by its Life Sciences business, with double-digit sales growth for single-use products. Leica Microsystems’ sales growth lagged other LS units, up in the low single digits on a core basis. Good sales were reported for Western Europe and China, as well as for the SP8 DIVE Deep In Vivo Explorer system. Within Danaher’s Environmental & Applied Solutions business, Hach core revenues grew more than 20% on strength in China.  

Illumina Growth Tops 30%

In the first quarter, Illumina reported robust quarterly sales growth in the first quarter (see IBO 4/30/18), led by sequencing consumables sales. Sequencing products sales and services accounted for 81% of revenues, with Microarray products and services representing the remainder. Total sales of Sequencing consumables grew 31.1% to $417 million. Sales of high-throughput sequencing consumables rose 34%, as sales of NovaSeq consumables, excluding a destocking order, were up 60% sequentially. Sales of NextSeq consumables rose 40% year over year. However, HiSeq consumables sales decreased as expected. In addition, sales of library preparation consumables rose 20% to account for over 10% of the company’s consumables business. Sequencing instrument revenue increased 17.9% to $112 million, with a sequential seasonal decline due to an expected multi-year upgrade pattern for the NovaSeq. New-to-Illumina and “straight-from-benchtop” customers represented 25% of NovaSeq orders. In fact, new-to-sequencing customer accounted for 50% of benchtop sequencer sales. The company also reported thatthe number of orders for the new iSeq totaled close to one hundred. Growth in microarray sales was led by the direct-to-consumer market. Microarray Service and other revenues doubled to $58 million, while sales of Microarray Consumables rose 26.1% to $87 million.   By region, US, European, Great Asia, Asia-Pacific and Other markets revenues rose 28.0%, 46.0%, 39.3%, 4.5% and 41.7%, respectively. As a result of the quarter’s strong performance, revenues related to oncology collaborations and higher sequencing consumables and array sales, the company raised the midpoint of its 2017 revenue guidance from 13%–14% to 15%–16% to reach $3.17–$3.19 billion. The company continues to expect to ship 300–350 NovaSeqs this year.  

Both Segments Fuel PerkinElmer Sales Growth

PerkinElmer’s revenue growth surpassed the company’s guidance (see IBO 4/30/18). Service revenue represented 30% of total sales. Geographically, Asian sales grew high single digits organically, with sales in both the Americas and Europe up in mid-single digits organically. BRIC grew in the high teens on an organic basis, highlighted by Brazil, India and China. China recorded mid-teens organic sales growth. Discovery and Analytical Solutions (DAS) sales growth was led by strong demand in the OneSource and informatics businesses. On a reported basis, Service revenue accounted for 40% of DAS total revenue. Drug discovery and high-content screening sales were also robust. Sales for DAS’ life sciences segment, which represented 35% of total revenues, were up 12% or 7% organically. Pharma and biotech sales rose high single digits on an organic basis, while government and academic sales increased mid-single digits organically. Representing 25% of total sales, DAS’ applied markets revenue grew 7%, or 2% organically. Industrial sales were down 1%, with weakness in sales to the petrochemical sector. However, industrial sales were up mid-single digits in the Americas and the company reported strong environmental market sales of ICP-MS and GC products. Sales to food and environmental markets were up mid-single digits on an organic basis. DAS’ Chinese sales grew in the high teens. Diagnostics sales were boosted by EUROIMMUN (see IBO 6/30/17), for which sales grew in the mid-teens to $82.0 million. Within the Diagnostics segment, infectious disease sales increased in the mid-teens, while reproductive health revenue rose mid-single digits. However, applied genomics sales declined slightly due to microfluidics sales a year ago. During the quarter, PerkinElmer Genomics processed five thousand samples, with the business expected to post sales of $8–$10 million this year. PerkinElmer raised its full-year revenue guidance to 5% organic growth due to strong sales growth, including EUROIMMUN, and currency changes. EUROIMMUN sales for the year are expected to reach $380 million. In total, Diagnostics revenues are estimated to increase 6% organically. DAS sales should grow 5% organically. For the year the company is targeting $50 million in revenues from new products, excluding EUROIMMUN, and recorded $14 million in sales from products launched last year in the first quarter. For the second quarter, PerkinElmer estimates sales will record 6% organic growth, including 15% sales growth for EUROIMMUN and 5% growth due to currency effects.  

Analytical Instrument Segment a Highlight for Thermo Fisher

Total company revenues rose 10.4%, 7% organically, to $5.9 billion (see IBO 4/30/18). By end-market, growth was led by the pharma and biotech end-market, for which sales rose 10%. Industrial and applied sales rose in the high single digits, with the company reporting a large order from the mining sector. Sales to academic and government end-markets improved mid-single digits, led by strength in Europe and China. Diagnostics and health care sales grew in low single digits. For the Analytical instrument segment, revenue rose 13% organically. Electron microscopy (EM), chromatography, MS and chemical analysis sales were strong, increasing faster than the company average. In particular, the company noted good demand for the new Thermo Scientific Orbitrap Q Exactive HFX. EM sales reflected demand from both the materials science and life science end-markets.  Excluding EM and all FEI sales, segment organic revenue rose 6%. Life Science Solutions organic sales growth of 5% was led by the bioproduction, NGS and biosciences product lines.  For the Laboratory Products and Services segment, for which sales were up 6%, the acquisition of Patheon positively impacted sales, as did the clinical trials logistics business and the research channel business. Specialty Diagnostics sales grew 5% organically, highlighted by the health care market channel. By region, Asia-Pacific sales rose in the mid-teens, including high-teens growth in China and strength in Japan, South Korea and Taiwan, to make up 22% of revenues. Both European and Rest of World sales grew mid-single digits, accounting for 26% and 3% of sales, respectively. Accounting for 50% of revenues, North American sales increased in low single digits. For the year, Thermo Fisher raised its sales guidance from 12%–13% to 13%–14% to total $23.6–$23.8 billion due to the strong first quarter, acquisitions and benefits from currency effects. Acquisitions are expected to add around 7% to sales growth, with currency adding roughly 2%, resulting in 5% organic growth, up from an earlier estimate of 4%–5%. Second and third quarter organic revenues are also expected to each grow 5%.  

Waters Misses Revenue Estimate

Waters first quarter revenues fell short of company estimates as a result of slower-than-expected MS sales and sales in India. MS sales suffered from weak demand for high-end systems for biomedical research and a realignment of the US sales force. Indian sales were affected by companies’ fiscal concerns. The company expects both situations to normalize over the rest of the year. All figures below are on an organic basis. By end-market, pharmaceutical revenue rose 3% but were up 6% excluding India. Sales were led by double-digit growth in China, which makes up about half of the company’s pharma business, and mid-single digit growth in developed markets. Sales to the government and academic sector jumped 7%, led by China but experienced weakness among biomedical research end-users, particularly in the US. Industrial sales fell 3% due in part in the MS sales disruptions and soft sales in China. However, TA sales increased 6%. Total company sales in China grew 7%, but Asian sales were flat. Sales in the Americas rose 4%, including 5% growth in the US. European sales rose 2%, with growth in pharmaceutical end-markets offset by slower government and academic, and industrial sales. For the Waters Division, total sales rose 1%. Within the Division, instruments sales slid 4% due to MS weakness, with strength in LC. Consumables revenue were up 6% to represent 50% of Division revenue. For the TA Division, total sales grew 6%, with instrument sales up 6%, led by demand for the Discovery thermal analyzers. Service sales rose 5%. Second quarter revenues are forecasted to grow 4%–6%, with currency effects adding 2%–3% to growth.

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