For leading international publicly held life science and analytical instrument companies, the second quarter of 2024 showed signs of improvement, with some firms reporting results slightly better than expected.
...In some cases, this meant smaller year-on-year drops. Merck KGaA’s Science & Lab Solutions was flat in US dollars, following a 7% decline last quarter. Sales at Waters fell 4%, beating last quarter’s 9% drop. Results for Danaher’s Life Sciences (-3.5%), Agilent’s Life Science and Applied Markets Group (-7%), and Shimadzu’s Analytical and Measuring Instruments business (-9% in USD) were all roughly the same as last quarter.
Agilent’s revenue fell 7.4%; and Waters was down 9%. Bruker’s Scientific Instruments business was flat. A few firms had bigger drops: Merck KGaA’s Life Sciences division fell 13% in EUR (-7.2% in USD). Bio-Rad’s life science group sank 25%, though its clinical diagnostics segment gained nearly 5%.
Revenue growth went into positive territory for a few firms. Thermo Fisher Scientific’s Analytical Instruments segment hopped from a 3% dip last quarter to 3% growth, and Bruker Scientific Instruments’ organic revenues, flat last quarter, logged an 8% gain.
Capital Markets Still Constrained
Capital equipment markets continue to be constrained, keeping instrument sales down, with exceptions for the top-of-the-line systems. Sales of consumables and services are providing a much-needed stabilizer.
The global pharma and biopharma industry continues to be soft. Most other applied markets were also quiet, but environmental analysis is still providing growth, fueled by PFAS applications. The academic and government markets proved a bright spot this quarter for highly differentiated research instruments, such asBruker’s NMR and timsTOF2 and Thermo Fisher’s electron microscopy and Orbitrap Astral systems.
Effects of China Stimulus Will Wait Until 2025
Conditions in China remain muted, but with a more positive outlook. For Waters, which is highly invested in China, pharma sales there declined 10%, better than expected and an enormous improvement on the 25% drop last quarter, mainly from better conditions in the generics market.
Across the board, the new Chinese stimulus is beginning to generate sales funnel activity and may have some positive impact in Q4, but the effects are expected mainly in 2025, as organizations wade through paperwork to get the funding.
Sales in North America and Europe were generally down in the low- to mid-single digits.
A Mixed Outlook
Current conditions have led to varied perspectives on the second half of the year. Agilent and Thermo Fisher have both raised their full-year revenue guidance slightly, while Danaher and Merck KGaA have made no change. Waters has added caution, as they now predict a slower-than-anticipated pace of recovery and a smaller fourth-quarter ramp compared to historic levels. Illumina has also lowered its full-year guidance, from -2% to -3%.