(Reuters) – Life sciences firm Danaher forecast a low single-digit percentage decline year-over-year in its 2024 adjusted core revenue on Tuesday, sending the shares down nearly 4% before the bell.
Life sciences companies such as Danaher, Agilent and Thermo Fisher had cut their sales forecasts last year on slowing growth in China paired with a funding crunch in biotech.
Rising interest rates have squeezed funding needed for drug development programs, weighing on demand for contract research services offered by Danaher and rival Thermo Fisher.
Danaher still beat expectations for fourth-quarter profit and sales driven by strength in its respiratory testing segment.
Demand for testing grew during the fourth quarter due to a seasonal increase in respiratory infections caused by COVID-19 or respiratory syncytial virus ahead of the holidays.
The company’s diagnostics segment that makes COVID-19 and DNA-based testing kits recorded better-than-expected sales of $2.72 billion, compared with analysts’ estimate of $2.38 billion.
Danaher’s $5.7 billion acquisition of protein consumables manufacturer Abcam is expected to cushion the hit from sluggish demand for some of its products from smaller biotech companies grappling with the funding crunch.
Its life sciences segment, which provides reagents and lab equipments used in the discovery of new drugs and vaccines, posted sales of $1.93 billion, compared to a forecast of $1.85 billion.
On an adjusted basis, Danaher reported a profit of $2.09 per share for the quarter, beating expectations of $1.91 per share.
Quarterly sales reached $6.41 billion, ahead of analysts’ forecast of $6.12 billion, according to LSEG data.
(Reporting by Christy Santhosh; editing by Milla Nissi)
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