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Danaher is a name not often linked to the Coronavirus vaccine industry. In fact DHR has been entrenched in the development of COVID-19 vaccines and therapeutics through its $21.4 bln acquisition of Cytiva last March and raised its Q1 guidance to the high end.

Danaher Cytiva

Image: Danaher Cytiva Lab

Danaher is forecasting core revenue growth to be above the high-end of its previous guidance range as the life sciences and medical diagnostic tools and instruments it manufactures continue to receive order way above expectations.

The virus is generating a major windfall for Danaher. DHR as a result raised its Q1 guidance, forecasting core revenue growth to be above the high-end of its previous guidance range issued just a few month's ago. DHR issued Q4 results on January 28 and forecasted non-GAAP core revenue growth, including newly aquired Cytiva, to be in the mid to high-teens range.

DHR now anticipates Q1 growth, including Cytiva to be approximately 29%. The company also provided an expected revenue growth rate of about 57%. Note the company is providing two different revenue growth rates.

The two numbers stem from the acquisition of Cytiva closing on March 31, 2020, only a few days before 1Q20 ended on April 3.  This meant that most of the year-ago quarter did not include contributions from Cytiva on a GAAP basis. For visibility the company is providing a non-GAAP growth rate that includes Cytiva's revenue contribution in the year-ago period.

Logically DHR's 57% estimated yr/yr growth forecast should be comparable to analysts' estimates,given that analysts have had nearly a year to incorporate Cytiva into their models. Well you know how that can go. DHR's projection equates to revenue of about $6.75 bln, which is about 10% above the consensus estimate.

Danaher Covid

DHR said In today's press release that the better-than-expected performance was broad-based across the portfolio, with notable strength experienced in the life sciences and diagnostics segments. These segments have high exposure to COVID-19 vaccine and testing development.

During the Q4 earnings conference call, CEO Rainer Blair stated that vaccine and therapeutic activity drove record bioprocessing demand with order growth exceeding 50% for its Cytiva and Pall Biotech businesses.

On the diagnostic side, revenue jumped by 23.5% as elevated virus testing demand drove a 100%+ surge in growth at Cepheid, which DHR acquired in 2016. Blair disclosed that COVID-related tailwinds added about 1,200 bps to core revenue growth in Q4, compared to 3.5% for its underlying base business.

Looking forward DHR is estimating COVID-related revenue to reach about $1.3 bln this year, over double last year's total.

As previously announced, Danaher will hold its earnings conference call for the first quarter 2021 on Thursday, April 22, 2021 at 8:00 a.m. ET.

While all we hear about is the vaccine names, Pfizer, Moderna and Johnson and Johnson DHR is quietly generating massive profits.  The companies involvement in bioprocessing and testing has created a powerful growth catalyst for Danaher which throughout this year and possibly beyond as pharmaceutical companies continue to advance virus-related medications.

About Danaher

Danaher is a global science and technology innovator committed to helping its customers solve complex challenges and improving quality of life around the world. Its family of world class brands has leadership positions in the demanding and attractive health care, environmental and applied end-markets. With more than 20 operating companies, Danaher's globally diverse team of approximately 69,000 associates is united by a common culture and operating system, the Danaher Business System, and its Shared Purpose, Helping Realize Life's Potential. For more information, please visit www.danaher.com.

Source: Danaher 

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