(Reuters) - Danaher (NYSE:DHR) beat Wall Street estimates for second-quarter profit and revenue on Tuesday, driven by strong demand for its genetic testing services, sending shares of the life sciences firm up nearly 8% in premarket trading.
The company, however, expects revenue from its core business to decline in the low-single-digit percent range in the third quarter as it anticipates reduced demand to weigh on its biotechnology and life sciences units.
Lifesciences firms have seen sluggish demand for their drug development services as cash-strapped biotech clients try to navigate a funding crunch amid high interest rates and government scrutiny of drugmakers.
Analysts expect investment in early-stage biotechs to improve this year as U.S. regulatory approval for innovative therapies containing a novel active ingredient or molecule have gone up over the past year.
On an adjusted basis, Danaher reported a profit of $1.72 per share for the second quarter, beating analysts' average estimate of $1.57 per share, according to LSEG data.
The company's diagnostics business, which makes COVID-19 and genetic testing kits, posted sales of $2.26 billion, topping estimates of $2.15 billion.
Its life sciences unit, which provides reagents and lab equipment used in the discovery of new drugs and vaccines, posted sales of $1.77 billion, compared with estimates of $1.78 billion. Danaher reported sales of $5.74 billion for the quarter ended June 28, beating analysts' estimates of $5.59 billion.