Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the guidance for Life Sciences in 2025, particularly regarding the pacing and when growth is expected to return? A: Rainer Blair, President and CEO, explained that the Life Sciences segment is facing some external noise, leading to a prudent approach in guidance. They expect life science tools to grow low single digits, with Pall and genomics down. Growth is anticipated to improve each quarter, with Q1 down mid-single digits, flattish in Q2, and ramping up thereafter.
Q: How is the new US administration affecting your market outlook, particularly regarding academic government funding? A: Rainer Blair noted that while it's early days with the new administration, they expect a more business-friendly environment. The election hasn't changed their view on their portfolio, which is positioned towards attractive growth trends in Life Sciences and Diagnostics. They anticipate some fluctuations but are confident in leveraging their portfolio and the Danaher Business System to outperform.
Q: Can you elaborate on the Diagnostics segment's performance, particularly regarding Cepheid respiratory and VBP in China? A: Matt McGrew, CFO, stated that Cepheid respiratory is expected to generate $1.7 billion, reflecting a normal respiratory season in an endemic state. The VBP impact in China accelerated in Q4, with $150 million expected for the year, up from the previous $50 million annual expectation.
Q: How is AI being leveraged across Danaher, particularly in diagnostics and R&D? A: Rainer Blair highlighted that AI is being used to accelerate assay development and integrated evidence plans, as well as in decision support systems. In diagnostics, AI is aiding in digital pathology, helping pathologists make faster and more accurate diagnoses.
Q: What is the status of the Abcam and Aldevron acquisitions relative to their deal models? A: Matt McGrew mentioned that Abcam is tracking close to its deal model, while Aldevron is behind due to slower-than-expected market recovery in genomics. Despite this, they remain committed to owning these businesses for their long-term potential in life sciences.
Q: How does the strong order growth in bioprocessing impact forward growth expectations? A: Rainer Blair noted that strong order growth, particularly in the fourth quarter, sets up well for 2025. The recovery is underway, with consumables back to normal and equipment demand improving, supporting their 6% to 7% core growth guidance for the year.
Q: How are patent expirations expected to impact Danaher's growth, particularly in bioprocessing? A: Rainer Blair explained that bioprocessing is driven by volume, and biosimilars, resulting from patent expirations, are a tailwind. As biosimilars penetrate new markets, they drive higher volumes, benefiting Danaher's growth.
Q: What are the biggest risks and potential upsides to your 2025 guidance? A: Matt McGrew emphasized a bottom-up approach to guidance, incorporating internal and external factors. Risks include noise in Life Sciences, while potential upsides could come from better-than-expected market conditions and cost management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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