DHR (DHR)

“We think it's about 250 basis point headwind in Q3, and those headwinds essentially go away year-on-year in Q4.”

“The Q3 guide assumes slight improvement off of Q2, call it 5%.”

“Finally, we expect a third quarter adjusted operating profit margin of approximately 26.5%.”

“This implies that core growth excluding respiratory will be approximately 5%, an acceleration versus what we saw in the second quarter.”

“We expect third quarter revenue growth to be approximately 2%-3%, which includes an approximately 250 basis point year-over-year headwind from respiratory testing.”

“We expect this momentum continues in the second half, and that's what gave us confidence here to raise our full year life science guide.”

“Leica Biosystems and Radiometer are solidly into the high single digits here, and we believe that continues for the long term.”

“We think it's highly unlikely that it does not return in 2027. We believe, without talking specifically to 2027, that these push outs to 2027 would likely then ultimately ship in 2027.”

“That's why we're feeling comfortable with that Q4 mid-single digit core growth rate.”

“We remain confident that growth will accelerate toward a mid-single digit exit rate this year.”

“Additionally, given our second quarter earnings beat and the earlier than anticipated completion of the Masimo acquisition, we're raising our full-year adjusted diluted net EPS guidance to a range of $8.45-$8.60, versus our previous range of $8.35-$8.55.”

“The trends we're seeing in the business, together with healthy underlying demand, reinforce our confidence in the high single-digit long-term outlook for Cytiva's bioprocessing franchise.”

“The quarter illustrates the benefit of our balanced end market and geographic diversification while reinforcing our outlook for accelerating revenue and earnings growth in the second half and beyond.”

“This strong execution and the earlier-than-expected close of Masimo enables us to again raise our full year adjusted EPS guidance.”

“It's 85% consumables. It's got great economics, and we expect that to grow high single digits here in the long term as well.”

“These continue to be Radiometer and Leica Biosystems, our specialty diagnostics businesses for us that continue to grow in the high single-digit range.”

“We're probably exiting more in that mid to high single digits in Q4 as we go forward.”

“EPS range at the midpoint, that implies nearly 10% EPS growth.”

“Respiratory, we're thinking given where infection rates have trended, about $1.6 billion or a touch below that for the full year.”

“I think our view is these underlying trends continue, and as respiratory headwinds moderate in Q4, we'll exit at that overall mid-single digit rate.”

“As markets recover, we expect our growth initiatives to gain further traction.”

“Our updated outlook reflects higher anticipated core revenue growth in our life sciences segment as we expect these markets to recover faster than our initial expectations, offset by a slightly more conservative outlook for bioprocessing, given some of the customer-driven timing dynamics we saw in the second quarter.”

“This results in a full year 2026 core revenue growth outlook in the range of 3%-4%.”

“We continue to expect to exit Q4 at the mid-single digit core revenue growth rate as we move past some of the headwinds from the first three quarters of the year.”

“As end market conditions continue to improve, we expect commercial and go-to-market execution, including autonomous lab-catalyzed demand, to further support growth acceleration across Abcam, IDT, and Aldevron.”

“While the transaction remains subject to customary closing conditions, including regulatory approvals, we expect to close by the end of 2026.”

“We expect the business to grow high single digits over the long term and to be accretive to adjusted EPS in our first full year of ownership.”

“We expect Masimo to be immediately accretive, both strategically and to adjusted EPS.”

“Obviously, there's some chance of this moving back into Q4. That's not within our planning assumption today.”

“So the way we're thinking about it is we just did -- we're expecting mid- to high single-digit earnings growth in the first half of the year, all in, and that puts us on the right path here for the rest of the year as we go forward.”

“So the way we're thinking about it is core growth, low single digits in the first half of the year, sequential improvement from Q1 to Q2, you see this reflected in the Q2 guide.”

“We feel good about our assumptions around the $75 million to $100 million headwind there in China, and that's only been validated by what we've seen in China here in the first quarter, even if the patient volumes were actually a little higher.”

“These essentially go away by the end of the year and why we believe we'll exit Q4 in that mid-single-digit range.”

“We're encouraged by improved trends in bioprocessing equipment and believe we're in the early stages of a multiyear investment cycle.”

“And Dan, I mean, from a balance sheet perspective, post close of Masimo, we'll go to about 2.5x net debt EBITDA. Given our strong free cash flow of $5 billion plus per year as well as EBITDA generation, I mean, this leverage will come down fairly quickly.”

“So we're encouraged here by what we saw in Life Sciences in the first quarter and expect that to play out positively for the rest of the year.”

“For the full year, while that might be a little bit lumpy as we go through the next quarter or 2, we do expect that to go from slightly negative to slightly positive, and that's quite encouraging.”

“I think as we go forward, we see positive growth for our Life Science consumables business here.”

“This year, the guide assumes that we're flat on equipment.”

“Equipment, what we're seeing there in the order book certainly underwrites and reaffirms the year-over-year improvement that we expected.”

“And with the strength of our balance sheet and more than $5 billion of expected 2026 free cash flow, we're well positioned for further capital deployment going forward.”

“For the full year 2026, there is no change to our expectation of core revenue growth in the 3% to 6% range.”

“As end markets improve, we expect continued progress on both growth and margins at Abcam.”

“We see activity in brownfield projects today with larger greenfield investments expected to follow.”

“We expect Masimo to be accretive to adjusted diluted net earnings per common share in the first full year post acquisition and to deliver high single-digit return on invested capital by the fifth full year of our ownership.”

“And then the other thing here that we talked about on the respiratory side, we probably need to see a little bit above normal respiratory season to finish the year here in Q4 back to that kind of endemic $1.8 billion rate that we see going forward.”

“Now since then, we have seen that IOI come down. But testing continues to be robust, and we have put out the perspective that we expect our first-quarter respiratory to be around $500 million of revenue.”

“The order book fully supports the high single-digit growth that we have been talking about for 2026.”

“We expect the clinical, think of research use only, testing that sort of thing. We expect that to remain stable as do we expect the applied market to remain stable.”

“We are assuming equipment is going to be flat for the year.”

“I'm making it very, very clear here. Bioprocessing on the consumable side for the year and for Q1, our assumptions are that will grow high single digits. It's probably going to be at the upper end of high single digits.”

“As these end markets continue to recover, we'll get back to that high single-digit growth over time.”

“We see that. In fact, the operating margins are 500 basis points higher than when we acquired the business. So, like what we see here for Abcam and expect to continue to see that trend here in 2026 as well.”

“We have got a 30¢ benefit from the 2025 cost actions. So that's in that 100 basis points of margin expansion.”

“The clinical and the applied markets have been solid and stable for several quarters, and we would expect that to be the same.”

“So, Jack, I think we continue to see improvement in the pharma end market. That would be the third quarter in a row that we have seen that improvement, and we would expect that to continue here going forward.”

“We expect the cost savings that we have generated there to sustain here for the long term.”

“So for us, bioprocessing should continue to have a positive development, and certainly, we expect China bioprocessing to grow in 2026.”

“With China, we think the volume-based procurement headwinds will moderate as we move through the year.”

“We are assuming consistent mid-single-digit growth outside of respiratory in China.”

“Lastly, we expect diagnostics to grow in a low single digit.”

“That said, we do expect growth will improve through the year as our own comps ease, particularly in our life science consumables businesses.”

“We are assuming that equipment is flat for 2026, which is off of a mid-teens decline in 2025, but that is supported by our current backlog.”

“First of all, we expect bioprocessing to remain strong at high single digits.”

“Our strong positioning in attractive end markets and high recurring revenue business models support our long-term expectation for high single-digit core growth with a differentiated margin and cash flow profile.”

“So looking ahead, we are encouraged by the momentum building across our portfolio and expect growth to accelerate as end markets continue to improve.”

“For the full year 2026, we anticipate core revenue growth in the 3% to 6% range.”

“In diagnostics, we are assuming higher growth in 2026 due to moving past the peak of headwinds from policy changes in China and our expectation that we will continue to execute well globally.”

“In life sciences, we are assuming a modest improvement in end markets, but assume growth will remain below historical levels given the current macro environment.”

“Looking across the portfolio, we are assuming bioprocessing growth will be similar to 2025, including continued strength in consumables, driven by healthy growth in monoclonal antibody demand and our strong positioning across the biologics workflow.”

“we expect strong demand growth to continue into 2026 and beyond.”

“Growth is expected to be led by consumables, with our current backlog and order trajectory supporting the equipment revenue improving to approximately flat for the year.”

“Now given the sustained and substantial activity levels at our customers over the last year, we anticipate high single-digit core revenue growth in bioprocessing for the full year 2026.”

“If we do better from a core growth perspective, then 30% to 4%, you know, there's probably likely some upside here to EPS.”

“The other level is bioprocessing, where seeing better than high single-digit growth for the year with equipment potentially accelerating or even consumables accelerating more as we see more biosimilars and mAb production increasing.”

“In respiratory, we have taken a look at that number again here in terms of the endemic level, and we think that's probably fairly consistent with 2025.”

“For the full year 2025, we're maintaining our full year adjusted diluted net EPS guidance range of $7.70 to $7.80.”

“By the end of the year, much of our diagnostic businesses, whether that's equipment or reagents will be localized.”

“I mean, I think we sort of have seen -- like you said, we are getting to the other side of the wave here that started in Q4 with the first reimbursement in China. So we will anniversary that.”

“Based on what we're seeing today, we expect cautious equipment spending through the remainder of the year.”

“But I think the frame that you've laid out of north of 100 basis points of margin expansion is very fair.”

“Yes. I mean, well, first, I would just kind of anchor on this is -- I believe that a 35% to 45% fall-through and the impact of just the 250 I talked about, that's north of 100 basis points.”

“And as far as Cepheid, again, outside of respiratory, our assumptions there will be essentially flat at $1.7 billion.”

“I would expect that for Beckman for next year, I mean, we can kind of get into a little bit more details when we give the formal numbers, if you will, in January, but they've been executing very well. They've got a good new product launch in the DxI 9000. They've been outside of China, that's been a mid-single-digit growth plus -- mid-single-digit growth business. And I would expect that, that would continue as we move into next year.”

“I mean I would say that for next year, our assumption is that we probably have maybe $75 million to $100 million of headwind here, which on a Danaher level is fairly modest and manageable.”

“Now we're assuming for planning purposes that equipment is flat next year, given that the order trajectory through Q3 has continued as it has in the first half.”

“In biotechnology, we expect high single-digit core growth in bioprocessing and that's similar to what we've seen in 2025.”

“So all up, all in, you're talking about a $250 million type savings number in 2026 that gives you, call it, $0.30 of EPS tailwind as we head into the year.”

“And we do expect the cost actions that $175 million to generate a net $75 million in savings.”

“And we do not expect these cost actions to repeat in '26, these are sort of onetime items.”

“And then from the math on the EPS perspective, I'd assume 35% to 40% fall-through on the volume plus the impact of the cost actions, and that is going to equal 100 basis points -- north of 100 basis points of margin expansion like Rainer talked about in the prepared remarks.”

“I would anchor at the low end of that range to begin with, and we'll kind of see how the year plays out as we go and we kind of provide some updates as we go.”

“Additionally, we anticipate respiratory revenue at Cepheid will be approximately $1.7 billion in 2026, consistent with our expectations for 2025.”

“And in Diagnostics, we're assuming higher growth in 2026 due to moving past headwinds from policy changes in China and our expectation that we will continue to execute well globally.”

“Looking across the portfolio, we're assuming bioprocessing growth trends remain at levels consistent with 2025, including continued strength in consumables driven by healthy growth in monoclonal antibody demand and our strong positioning across the biologics workflow.”

“I think with the installed base continuing to sort of expand and as we start to add more menu on to existing customers, I suspect that those levels are a good place to start as well.”

“Yeah. I mean, I think it's we feel very comfortable and confident that we are going to get all of that $150 million. I think we've probably got about half already, Scott, and the other half will come as we work through the second half.”

“And all of this reaffirms our belief that bioprocessing is a high single-digit grower both in 2025 and the long term.”

“And we actually expect that strong non-respiratory demand to continue in the low to mid-teens for the full year.”

“And so we do not expect in our guide a significant step up here.”

“So our guide contemplated and did not expect significant revenue contribution from that particular therapy.”

“And so, therefore, from our perspective, as we've always said, we plan on offsetting all the tariffs and we only plan on offsetting them.”

“Yeah. I would say that from a number perspective, we're still at, you know, kind of a couple hundred million dollars of exposure right now today.”

“So there's really no change to our expectations of a $150 million adverse impact from volume-based procurement in 2025.”

“Your sort of best step up from one half to two half to go from down low single to upload single life sciences. Call it $150 million.”

“So in genomics, we expect to see better comps as an example.”

“I think on the margin, probably a little bit lower at D and M. But we're probably a little bit better here in bioprocessing in that $6 billion piece.”

“But then you step right back up, Q4 is our best quarter in bioprocessing.”

“you know, we really know, we will see Q2 kind of step down in Q3, very traditional for us have a kind of a volume step down in Q3.”

“I think we're probably going to do roughly the same, maybe a little bit better here in the second half.”

“So kind of to your first part of the question on how on bioprocessing, I think the simple answer is yes. High single digits is still our guide for the year for the bioprocessing piece.”

“but we would expect that that overhang here clears here certainly in the next, you know, six to twelve months.”

“We expect high single-digit growth in the second half of the year.”

“For the full year 2025, we continue to expect core revenue growth of approximately 3%.”

“No. I mean, I think we'll be able to capture it.”

“No, I think the cadence is right. It kind of -- I think it will layer in fairly evenly. Might get a little bit more here in Q3 than Q4, but I'd have to -- but I would just put it for modeling, I'd do it evenly.”

“I think so, yeah. I wouldn't change off of that, come off of that. And VBP was very much in line with what we thought here in Q1.”

“So, generally speaking, we expect this to be stable. We're prepared with our supply chain to supply China.”

“So, as we think about the guide here in 2025, we have taken account of the fact that we expect the U.S. government and academic market to continue to soften with the noise that we're hearing.”

“So I think our price for the year is kind of flattish is the assumption at this point.”

“We continue to expect core revenue growth of approximately 3%, which assumes better performance in our bioprocessing business will be offset by slightly more modest expectations for life sciences.”

“Regarding tariffs, based on what is currently implemented, we believe we can largely offset the impact from these tariffs through a combination of supply chain adjustments, surcharges, manufacturing footprint changes and other cost actions.”

“There's nothing that we see in our end markets that makes us think differently about our long-range plans. And as we've talked about before, some of the headwinds that we've talked about for 2025, we believe to be transient. And once we comp those, we expect to be back at those higher growth rates for the long-term plan.”

“But actually we don't think that the current state, so where we sit today is where things ultimately end up. But regardless, we're really well-positioned to largely offset these headwinds.”

“I feel pretty comfortable with the $1.7 billion still versus $2 billion being some sort of new number.”

“certainly expect every quarter thereafter to be better.”

“Life Sciences, that they're expected to be consistent here in the tools sector.”

“I think if you sort of think about diagnostics, maybe just outside of China, we are kind of mid-to-high single-digits here, for the guide.”

“So biosimilars, higher volumes tailwind for Danaher.”

“But the core tools we think is still in pretty good shape and kind of at the high end of low-single-digits.”

“As we think about the phasing, we would expect each quarter to get a little better.”

“we're assuming Life Science tools up for - up low-single digits and Pall and Genomics will be down.”

“In addition, we expect an approximately 2% revenue headwind due to recent strengthening of the U.S. dollar.”

“I think we think now and we saw 50 here in '20 in Q4. So probably 200 all-up, but 200 in two years instead of the three that we thought.”

“I just - maybe we're proven wrong, but given what we've seen in the data, I think $1.7 billion is - it's probably going to be a pretty regular - pretty normal respiratory season.”

“We expect that, over time here, to provide us some tailwind.”

“But given what we've seen here through Q3, I think we're going to see a gradual recovery continue into '25.”

“Tycho, we're still looking here to see how the fourth quarter plays out and to see whether we can see a pickup in the stimulus, particularly in China, while we do expect the developed markets to be stable along the lines that I just discussed for Q3.”

“So to wrap up, we're pleased with our better-than-expected third quarter performance and expect the trends we're seeing today to continue into Q4.”

“and a full year adjusted operating profit margin of approximately 29%.”

“For the full year 2024, there is no change to our previous guidance and as a reminder, we anticipate a core revenue decline in low single-digit percent range and a full year adjusted operating profit margin of approximately 29%.”

“based on activity in the third quarter and our expectation of a respiratory season with normal severity, we expect respiratory revenue of approximately $1.7 billion for the full year of 2024.”

“we've seen demand at these customers steadily improve throughout the year as they're moving past inventory destocking and anticipate this gradual recovery will continue over the coming quarters.”

“we continue to expect low single-digit core revenue decline in our bioprocessing business for the full year 2024 and this includes an assumption of high single-digit core revenue growth in the fourth quarter.”

“we sort of assumed that it was going to be kind of $150 million of impact over three years really starting this year as we ramp up.”

“Well, our book-to-bill is 0.9, Scott. And as we've said, in order to make our full year guide here of bioprocessing being down low single digits we have to maintain the 0.9. And that's certainly how the first half has played out here, and we're confident that, that will continue to be the case.”

“Now Scott, first, it's important to note that this is not a change on our view on capital allocation. So we maintain a strong bias towards M&A, and we're going to continue to be active on the M&A front.”

“we've talked about this business being a 35% to 40% kind of incremental fall through. I don't see any reason why that would not be the case, especially as we sort of return to growth in bioprocessing.”

“Now as you think about the second quarter -- the second half, excuse me, we're going to see the comps easing a bit, and that will certainly contribute to some stabilization. But we would expect this normalization process for Life Science tools and consumables to continue through 2024.”

“And we don't expect to see the funnel convert into orders in any meaningful way here in 2024. We view that more as a 2025 event that people are waiting for their shovel-ready projects to receive funding.”

“We did about 2.5% here in the quarter. It's probably a pretty good marker for the full year.”

“And for 2024 as a whole, we think we will likely be a little above our historical average of 75 to 100 basis points.”

“As you know, we don't guide to book-to-bills or orders, but basically the guide is built on the assumption that as we have 0.9 here for the year, we'll exit our year with high single-digit or better growth.”

“I think we have sort of historically talked, both -- like I talked on the last call, Q4 and Q1 will typically be better margin quarters for us, given like you said, the operating leverage that we get out of bioprocessing and respiratory, I don't think that, that will be any different here in this year.”

“As a reminder, we anticipate a core revenue decline in the low single-digit percent range and a full-year adjusted operating profit margin of approximately 29%.”

“So we continue to expect respiratory revenue of approximately $1.6 billion for the full year 2024.”

“However, we don't anticipate this to convert to orders until 2025, as these programs are in early stages of implementation.”

“Underlying demand for biologic medicines also remains on track to grow at a high single digit or better rate again for the full year 2024.”

“There is also no change to our assumption of a bioprocessing core revenue growth rate of high single digits or better as we exit the year.”

“So based on the trends we saw through the first half of the year, we continue to expect a low single digit core revenue decline in our bioprocessing business for the full year of 2024.”

“But I think over time, 35%, 40% fall through, and this is a business in a normal time that our adjusted operating margin should be in the low 30s.”

“Our strong positioning and attractive end markets coupled with durable, high-recurring revenue business models, and the power of the Danaher business system supports our long-term expectations of high single-digit core revenue growth with a differentiated margin and cash flow profile.”

“We're going to continue to take share. There's plenty of opportunity for share gain, not just in respiratory testing.”

“What that likely means in the shorter term is that we're more likely to do smaller bolt-ons and medium sized deals, which for a company of our size, $25 billion roughly revenue, continues and will continue to move the needle.”

“So that flow through, of course, as we've been contracting, was very high on the negative side, but you can expect that we've done a lot of work on the cost side during the pandemic. We have not sat idly by here and we've taken full advantage of this time to continue to drive our fixed cost base down to be able to benefit from the volume leverage, which we expect over time. So that's going to be a very attractive incremental flow through as volumes recover going forward.”

“We've talked about $1.6 billion here in the guide for 2024. And we believe that to be a sustainable level of respiratory testing.”

“We would say this is still in the earlier stages of that normalization process, but expect to start seeing improvements in the second half, not only because of better or easier comps, but also because we would expect the activity level to return here as pharma companies and other researchers and applied markets start replacing their installed base and getting back to a normal rhythm.”

“So, large pharma for us actually was not slow out of the gate here in the first quarter. In fact, as we look at prescription rates here from 2018 forward, we continue to see in biologics a growth rate of 9%, 10%. And that is sustained here. And we actually believe a net of any inventory correction that we're starting to see that demand signal, more of it certainly in the first quarter. And we would expect to see more of it as we go through the year.”

“So, we are saying that in the second half in bioprocessing, we'll see mid to high single digits with an exit rate of high single digits or better.”

“And lastly, I would say China, China remains as we have forecast at a low activity level and is not really contributing from a tail or headwind.”

“It typically takes two, three quarters before we start seeing that improved funding level play out in actual orders.”

“Now as it relates to the inventory destocking, for us, we believe that we'll largely be behind -- have the destocking behind us here at the end of the second quarter.”

“We've really seen no change in the activity level, which continues to be along the long-term growth rate that we've been talking about, high single-digits, 10%.”

“Life science is starting to stabilize really at the activity levels of the second half of last year. We expect that to continue through the first and then see gradual improvement here in the second half of the year, also from a comp perspective.”

“We think, our life science instrumentation business will, for the year, be down low single-digits.”

“I mean, I did say that it doesn't go over one, but it gets pretty close in the second half.”

“Now, for China this year, as it relates to our guide, we're assuming that China will be down high single-digits.”

“We are actively trying to continue to destock and get as much of this behind us as we can. And so I think, we've been pretty aggressive with that. We're going to remain aggressive with that.”

“So the second half ramp in bioprocess assumed in this guide is about a $250 million year-over-year second half increase.”

“But we are not assuming book-to-bills go above one in any given quarter.”

“We are assuming book-to-bills improve slightly, like I said, kind of from the 0.8, 0.85s into the 0.9s.”

“This guide calls for a slight improvement versus our demonstrated book-to-bill of the last couple quarters.”

“I think we're going to be through that here in the first half, which then sort of speaks to why we think it gets a little bit better in the second half of the year.”

“And as far as the rest of the world, I think we'll be down in the first half and then kind of return to growth here in the second half after we get past the destocking.”

“And then I think for the full year, I just think even that will still be down kind of mid-teens for bioprocessing in China.”

“So I think China for the year for bioprocessing, you should probably think about the first quarter being down similar to what we saw in Q2, Q3, and Q4 last year call it north of 40%.”

“As we look at Diagnostics, which we are guiding up low single digits, we see no change to the underlying trends, patient volumes have normalized. And in the non-respiratory business, we expect growth of mid-single digits and of course that's offset by lower respiratory revenue, which was $1.9 billion in 2023 and we anticipate that that will be $1.6 billion in 2024.”

“And then lastly on Life Sciences, we expect developed markets to be relatively consistent with 2023.”

“Now if we look at Life Sciences, we expect Life Sciences to be down low single digits for the guide and we expect a slow start and we should see growth improve here through the second half given some of the comps that we have seen as the normalization, particularly in the instrument business, continues and we've been talking about that for some time and we expect that to continue into 2024 as well.”

“Second half we expect to return to mid to high single-digit growth and we believe by then that the destocking in North America and Western Europe will have largely been completed and of course the comps ease there as well.”

“Now at a high level, we actually expect the dynamic to be opposite of 2023 with a slow first half returning to growth in the second half.”

“Life Sciences down low single digits and Diagnostics up low single digits.”

“Additionally, Cepheid's respiratory franchise is now six times larger today than it was prior to the pandemic and we expect this to be sustainable.”

“We anticipate core revenue to decline in the low single-digit percent range, which assumes a core revenue decline in the first half of the year before returning to growth in the second half of 2024.”

“This includes an assumption of a mid to high teens revenue decline in the first half of the year followed by a gradual improvement to a core growth rate of high single digits or better as we exit 2024.”

“For the full-year 2024, we expect core revenue in our Bioprocessing business to be down low single digits.”

“While we expect this transitional period to continue through the first half of 2024, these proactive steps paired with the transformation in our portfolio provide a strong foundation for sustainable long-term revenue and earnings growth.”

“So, we do believe that we're at the bottom here in 2023 in bioprocessing.”

“But I think $1.2 billion would be sort of where I would base it as a planning kind of purpose going forward.”

“Now, having said that, we do expect that this inventory dynamic and what's going on in China is going to also go into, if you will, impact into 2024 as well.”

“So, with that as a context, for the second half, there's really no change to revenue as Q3 offsets Q4.”

“Now, as it relates to life science instruments, there we've seen some incremental weakness in Q3 and we would expect that to continue or step down slightly here in Q4.”

“I think we anticipate that it will be like that in Q4 as well.”

“But we do continue to expect our base business through the full year for bioprocessing to be down 10%, so as expected.”

“And for Q4, we think that looks a lot like Q3 with likely similar book-to-bill.”

“Additionally, we expect a full year adjusted operating profit margin of approximately 29%.”

“And we also expect total core revenue to decline low double digits for the year as a result of lower demand for COVID-19 testing, vaccine, and therapeutics.”

“Turning to the full year 2023, we anticipate core revenues in our base business will be down slightly.”

“Additionally, we expect the fourth quarter adjusted operating profit margin of approximately 28%, which includes additional anticipated productivity initiatives to further adjust our cost structure.”

“We also expect total core revenue to decline in the high-teens percent range, primarily as a result of lower demand for COVID-19 testing, vaccines, and therapeutics.”

“As we move into the fourth quarter and our customers begin planning for the respiratory season, we now expect approximately $1.6 billion of respiratory testing revenue for the full year versus our previous expectation of $1.2 billion.”

“We expect Abcam will be accretive on multiple levels, including core growth, earnings, and talent, and look forward to welcoming this incredibly innovative team to Danaher once the transaction closes.”

“Based on what we're seeing today, we're maintaining our full year outlook of approximately 10% base business decline in bioprocessing, which assumes that market conditions in the fourth quarter are consistent with what we saw in the third quarter.”

“We think that's kind of two, three year kind of run rate here. So, pretty modest and manageable for us over the period.”

“So speaking of Veralto, we remain on track for a fourth quarter 2023 separation.”

“Now as we look forward for the remainder of 2023, we do see that and expect that to moderate somewhat. But we do expect to be above our historical averages here for the remainder of the year.”

“I think our assumption is that we're going to be flat in those businesses as China stimulus backlog kind of rolls off and not have the impact that it had in the first half.”

“So we think really the second half ends up being flat for Life Science instrumentation, putting the full year at low single digits as the normalization process, if you will, from what has been over several years now, very elevated growth rate continues.”

“probably something in the range of a couple of hundred million of it will be a bit of a one-time cost that we are hitting and taking P&L in this year that probably should come back to us here next year as well, as the savings that we have moving forward.”

“And just to give you a sense here, our China business in 2022 was about $1.3 billion, slightly over that. We expect that to be about an $800 million business by the end of 2023, which would be about 10% of the total bioprocessing business at Danaher.”

“And frankly, we don't see that getting better here in the second half.”

“I think we'll be down modestly in the second half.”

“And as we look forward here to the second half of the year, we think that our orders will be down modestly.”

“We continue to expect approximately $1.2 billion of respiratory testing revenue for the full year.”

“Additionally, we expect a third quarter adjusted operating profit margin of approximately 26%, which includes the impact of efforts to adjust our cost structure and capacity in response to COVID transitioning to an endemic state, particularly within our Diagnostics and Biotechnology businesses.”

“And we think 2023 probably is the bottom.”

“Now, as it relates to the full year in China, we expect our full year in China to be up low-single digits for Danaher overall based on the market recovery, exiting COVID as well as, if you will, a normalization of the activity level in bioprocessing.”

“But for the visibility that we have today, we are not expecting an improvement in that segment for the remainder of the year.”

“So, just to confirm on the topic of emerging biotech, our assumption is and our guide reflects that the activity level in emerging biotech stays for the remainder of the year as it played out in the first quarter.”

“Biotech is probably the other one after we get through some of these costs. The same math there was biotech was, call it, high 30s prior to the pandemic. Again, it peaked at around, call it, 45% and change. And after we sort of get through what I think we are going to do there, they are probably going to be more like low-40s.”

“And then maybe just to give you some sense of what’s that look like in – once we are done with that kind of in Q4 and as we head into ‘24, Scott, I think Cepheid in 2019 was a 20% to 25% OP business, during the peak of the pandemic here, it probably was north of 45%. And after we get through what we are going to do in the next couple of quarters, like I have said on the capacity reduction side, starting kind of in Q4 and heading into ‘24, they are going to be 35% to 40% margin, right.”

“So, Vijay, we’re basing our view on the second half. Also based on what we’re seeing in the current market environment, which we just talked about as well as our order book. And like I said a minute ago, in order to support a higher guide for the second half, we need to see different activity levels here in Q1 and Q2. And that’s not the case for two reasons.”

“So, we continue to believe our growth rates moderate to the historical levels in ‘23, and that’s what our value reflects.”

“And then just to reiterate, to support a significant second half ramp, we would start to see that activity level increasing now and in the second quarter. And we’re just not seeing it to the degree that would support that.”

“Now turning to the full year 2023. Despite the near-term and temporary challenges within bioprocessing, we anticipate mid-single-digit core growth in our base business.”

“We continue to expect approximately $30 million respiratory tests and $1.2 billion of revenue for the full year.”

“Based on our most recent customer conversations, we now expect the inventory normalization process to continue through the second half of the year.”

“Results in China were better than expected driven by a quicker-than-anticipated recovery in diagnostic testing and a more favorable life science research funding environment. We expect these positive trends to continue as we move through the year.”

“We think from where we sit today, low single digits for the full year is a good way to think about it. And of course, we'll continue to update as we go through the year here.”

“I think that guide of 200 to 300 basis points would keep us at positive price cost.”

“And then as it relates to EAS, we would expect that now to normalize after having had just banner growth here in the last couple of years to be more the low to mid-single-digit growth, probably skewed more to mid-single digits for the year.”

“As it relates to our Diagnostics business, without COVID testing, we also expect high single-digit growth there, if you think about the growth in Leica Biosystems, Radiometer and as patient volumes normalize, supported also by solid growth at Beckman diagnostics, once again without COVID testing high single digits.”

“We'll have a $225 million FX headwind in Q1.”

“High single-digit core and base business is going to be $1.7 billion in change, let's call it, falling through 35% to 40%, but just not enough to fully compensate what's happening with our COVID headwinds here.”

“And then we're going to have $2.5 billion of testing follow-up as we think we get to a more endemic state on Cepheid testing.”

“We're going to lose, call it, $3.2 billion of COVID headwinds in the year, $700 million from the vaccines and therapeutics as we go from, call it, $800 million to a little over $150 million or a little under $150 million.”

“As you think about Western Europe, including COVID headwinds, we would expect that to be flat here in the first quarter and then up low single digits.”

“we have seen the cycle time of deals. So that period of time between lead, capture and capturing the order extending here in the fourth quarter, and we would expect that to continue.”

“we expect that patient volumes then improve throughout the year and are expecting low single digits for the full year in China.”

“we continue to expect some cost pressures there, and we'll look to have pricing of 200 to 300 basis points, probably closer to 300 basis points.”

“we expect high single-digit core growth in our base business.”

“we believe COVID-19 will enter an endemic disease state in 2023, and as a result, expect to ship 30 million respiratory tests and generate $1.2 billion of revenue for the full year.”

“And based on these discussions, we anticipate non-COVID bioprocessing core growth will be high single digits for the full year 2023.”

“In light of these dynamics, we now anticipate COVID-19-related vaccine and therapeutic revenue will be approximately $150 million for the full year of 2023, down from approximately $800 million in 2022 and lower than our previous expectation of $500 million.”

“Looking to 2023, we expect customers to further reduce their COVID-19-related programs.”

“With several of our customers' biologic therapies progressing through the regulatory approval process, we anticipate the size of our bioprocessing and genomics businesses to increase meaningfully here in the coming years.”

“We anticipate lower testing volumes to continue through the first quarter of 2023 before gradually recovering through the balance of the year.”

“Now for the full year 2022, there is no change to our previous guidance of high single-digit core revenue growth in our base business.”

“So we see demand remaining strong across the board for all these research applications that I referenced. And as a result of that, we also see that in our order rates and backlog position, not just here for Q4 but also going into '23.”

“And that that's a constraint that we would expect to see get better here over the next 12 to 18 months, but currently still see that as an area to watch out for.”

“Sure. So as you just said, just to level set, you see high single-digit growth here in China, both for Q3 and we anticipate a similar level in Q4.”

“And then as it relates to COVID testing, we do still anticipate that step down, the experts that we speak with, our customers still think that COVID is endemic by the end of '23, beginning of '24 and that will step down there from where we've been here, close to 50 million tests to about 30 million tests or the $1.2 billion roughly of COVID revenue.”

“And so we think mid-single-digit plus from today's point of view, for the base business is the right way to think about it.”

“You know that we're going to have an FX headwind next year on the top line of probably, call it, $800 million.”

“But of course, that's a number that we watch very closely. More importantly, we think that the non-COVID business, which, of course, will again proportionately be a much larger part of the business, will continue to be very robust.”

“We continue to think about price as a lever for us. And we think that lever is available to us next year as well.”

“So, we do expect an inventory burn down with those players here in the coming quarters.”

“We continue to expect operating profit fall through of approximately 25% for the full year.”

“We expect these trends to continue through the fourth quarter resulting in high single-digit core revenue growth in our Bioprocessing business for the full year.”

“And in 2023, like I said, we'll talk about that more in January, but we don't have reason to believe here that this will be significantly different.”

“I would say that the fall-through on that is probably going to be the pretty typical 35% to 40% fall through.”

“As we think about the Bioprocessing business for 2023, we still think that there is room for $500 million of COVID opportunity in order to support the needs of the population, the variance to replenish expired sell-by dates and all the things that you can think about.”

“We expect the fourth quarter to be similar, and we're going to try and keep that momentum going here in the new year as well.”

“But today are not concerned about what we see here for the next call it 18, 24 months.”

“Now, as we think about our 2023 guide, which I think, is what part of your question was trying to tease out, we feel good about our mid-single digit plus positioning there where for, for the long term, which we have talked about in a number of occasions.”

“No, I think we feel continue to be really comfortable with our full year guide here.”

“So if you think about where we're at from a price cost perspective we like – we like where we're at. I mean, each of our segments was positive on the margin side here during the quarter. So I do think that as we sort of go forward that we've got – we've got our arms around the price cost and we feel pretty good.”

“For the full year 2022 there is no change to our previous guidance of high-single-digit core revenue growth in our base business and mid-single-digit core revenue growth overall.”

“Now that said, there is no change to our high-single to low-double digit core revenue growth outlook in our bioprocessing business for the year as customers are accelerating their investments across all other major therapeutic modalities.”

“As we sort of think about Q3 what we are sort of hearing, we think that it's going to look a little bit more like the mix we saw Q3 of last year, which was 80% COVID only, 20% four-in-one. So on that, on our 325 million call it 8 million tests or so that we think we do think it'll be kind of skewed a little bit more like it was last year.”

“For a normal year, we would see China in the low double digits, low teen kind of growth. We'd say for the full year, this year in view of what we've seen in the first half, high single digits is the way to think about China, which we consider to be strong growth in view of some of the macro challenges that China is facing today.”

“And we still think our framework of about $1.2 billion of COVID testing revenue in 2023, which is roughly around 30 million tests, is the right way to think about it.”

“And when you unpack that a little bit, we see bioprocessing could be up high single digit and that's consistent with what we've spoken of.”

“And that's a good – that's a good placeholder here, I think for the second half as well.”

“Yes. I think barring any additional FX headwinds or something who knows what could happen out there these days, but barring anything else, barring FX or some sort of other macro event, yes, I think that's right 35% to 40% on our base business is a good way to think about margins as we head into 2023.”

“I think maybe the easier way to think about where we're thinking about for Q3 is we're expecting our EBITDA margins to be about 30% in the quarter.”

“And then for Q3, revenue is going to be down $200 million year-over-year, and that is all due to FX headwinds.”

“Despite that additional FX headwind, we expect to be at the high-end of the range that we talked about earlier of 20% to 25% from a fall through perspective.”

“So we continue to watch that, but fundamentally expect the second half in China to be more constructive than it was here in the second quarter.”

“And as I talked about there in my prepared remarks, we took up that that COVID testing number to about $2.5 billion here from around $2.2 billion.”

“Given our strong second quarter performance, we now expect operating fall through at the high end of our previously communicated range of 20% to 25% for the full year.”

“Patient volumes remain slightly below normal levels, but we expect continued recovery as we progress through the remainder of the year.”

“we're currently seeing more normalized business operations in China and expect this positive trend to continue for the balance of the year.”

“That’s going to continue to pace out as we add line after line after line. But I would say that these are programs that are coming on, on or better than schedule as the team continues to gain speed here not only with their subject matter expertise, which is differentiated.”

“So, we feel very confident on the basis of what’s going on outside of COVID. And that’s why we look at it together because it’s the aggregate that we look at and that really ultimately count that, that will drive that high single-digit, low double-digit growth here for 2022 and also supports our high single-digit perspective beyond that.”

“This is mostly about China getting back to normal activity levels and both customers as well as our plants having the makeup capacity to make up for what we think are relatively short shutdown period. Having said that, the business is a large one, and there is always pockets that will grow faster. So between the two things, we feel confident that our guide for the full year holds.”

“I mean I think you think about that that is going to be a big part of that will be Cepheid and the volume that we are seeing there. So, as long as we have got that volume and we expect to have a touch less here into next quarter. But I think those margins are pretty sustainable at that level.”

“And we think for 2022, we continue to think that the $500 million revenue number is a good number, 40% in Q1. We certainly expect to be in the first half year, well over our expectation of 20% plus that we previously talked about. So, $500 million for the year is a good number, and that team is firing on all cylinders.”

“right now, FX is going to be a $0.35 EPS headwind year-over-year, and that’s a pretty meaningful number for us here during the year.”

“We continue to expect both a low single-digit core growth headwind from COVID-19 testing and overall mid-single-digit core revenue growth.”

“For the full year 2022, there is no change to our previous guidance of high single-digit core revenue growth in our base business as we expect the shutdowns in China to normalize as we move through the remainder of the year.”

“I mentioned the COVID-related vaccine and therapeutic bioprocessing business. They'll probably be roughly flat here in 2022.”

“We continue to see investments going in there strongly. And so we don't anticipate any near-term impact due to Fed rate in that particular area.”