Rainer M. Blair
President and Chief Executive Officer at Danaher
Thank you, John, and good morning, everyone. We really appreciate you joining us on the call today.
Our team executed well during the second quarter, delivering better than expected revenue, earnings and cash flow. We were particularly pleased with the sustained positive momentum in our bioprocessing business and with the strong performance of Cepheid, which we believe gained market share in molecular testing again this quarter.
Now, across the portfolio, market conditions were largely as we anticipated. In our Bioprocessing business, conditions in the U.S. and Europe continued to improve, and we were encouraged to see orders increase high single-digits sequentially this quarter. In China, bioprocessing demand and underlying activity levels were stable sequentially, but remain weak as customers continue to manage liquidity. In Life Sciences, capital equipment investments remain constrained, while recurring revenue was relatively stable. And in Diagnostics, we saw healthy demand globally across our businesses.
As we move through this transitional period, we believe Danaher is well positioned for sustainable long-term value creation. Our strong positioning in 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.
So with that, let's take a closer look at our second quarter 2024 results. Sales were $5.7 billion in the second quarter and core revenue declined 3.5%. Geographically, core revenues in developed markets were down low-single digits with strength across Diagnostics, offset by declines in Biotechnology and Life Sciences. High-growth markets declined high-single digits, including a high-teens decline in China. Our gross profit margin for the second quarter was 59.7% and our adjusted operating profit margin of 27.3% was up 60 basis points as the favorable impact of cost savings initiatives more than offset lower volume.
Adjusted diluted net earnings per common share of $1.72 were essentially flat year-over-year. We generated $1.1 billion of free cash flow in the quarter and $2.6 billion year-to-date, resulting in a year-to-date free cash flow to net income conversion ratio of 129%. Now additionally, through the second quarter and end of July, we repurchased approximately 19 million shares. While M&A remains our bias for capital deployment, we believe these repurchases will provide an attractive return given the strength of our long-term organic growth, earnings and cash flow outlook.
Now, let's take a closer look at our results across the portfolio and give you some color on what we're seeing in our end markets today. Core revenue in our Biotechnology segment declined 7% with the Bioprocessing business down high-single digits and the Discovery and Medical business down mid-single digits. In our Bioprocessing business, revenue declines moderated from the first quarter as we believe our larger customers in the U.S. and Europe have worked through the majority of their excess inventories and are returning to normal ordering patterns. Many of these customers are also seeing strong momentum for therapeutics in their late-stage pipelines, which is promising for our future growth. Our emerging biotech customers continue to prioritize projects, particularly for cell and gene therapies in an effort to manage liquidity. However, we are encouraged by the improvement in the overall funding environment, which is a positive leading indicator for these customers.
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 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. Biologics market remains very healthy as evidenced by the increasing number of treatments both in development and production. Notably, the number of new FDA approvals for biologic and genomic medicines in the first half of this year nearly doubled compared to the first half of 2023, and the full-year 2024 is on track to set another record. 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. So, given the substantial and sustained increase in approvals and production volumes, we expect the growth rate in bioprocessing to remain very robust for many years to come.
We continue to make substantial investments in innovation to support our customers as they pursue these life-changing therapeutics. To support monoclonal antibody production, which comprises the majority of our bioprocessing revenues, Cytiva expanded its comprehensive filtration portfolio with the launch of Supor Prime. Now Supor Prime filters are specifically designed to address key challenges associated with high concentration biologic drugs, whose complex formulations and high particle loads make them prone to premature filter blockage and costly drug product losses.
We're also developing innovative solutions for emerging modalities. In May, Cytiva introduced the Sefia cell therapy manufacturing platform, which is helping address critical cost and capacity constraints associated with CAR T-cell therapy manufacturing. The Sefia platform's fully automated manufacturing process can increase productivity by up to 50% per year compared to the industry standard, reducing our customers' costs and increasing throughput. Addressing these key manufacturing challenges will help improve patient access and facilitate wider adoption of these important therapeutics.
Now, turning to our Life Sciences segment. Core revenue decreased by 5.5%. Core revenue in our Life Sciences Instruments businesses collectively declined high-single digits as expected with trends in the second quarter largely consistent with what we saw in the first quarter. Global pharma and biotech demand remained weak, academic markets were weaker sequentially, and applied markets performed comparatively better, particularly for our advanced solutions, which provide critical capabilities needed by our customers.
In China, we're seeing improving sales funnels and quoting activity driven by the recently announced stimulus measures. However, we don't anticipate this to convert to orders until 2025 as these programs are in the early stages of implementation. So in the meantime, many customers are delaying purchasing decisions as they await funding. Now, last month at the American Society for Mass Spectrometry meeting, SCIEX reinforced their market leadership in quantitative mass spectrometry with the release of the 7,500-plus triple-quad mass spectrometer. The 7,500-plus pairs the ultra-high sensitivity of the 7,500 with faster acquisition speeds and the ability to maintain the highest sensitivity quantitation for up to twice as many sample runs. This makes the 7,500-plus particularly well suited for complex applications such as PFAS analysis where customers need to test more samples across diverse sample types with high-precision to meet challenging new regulations.
In our genomics consumables business, core revenue declined mid-single digits in the quarter. High-single digit growth in gene writing and editing solutions was more than offset by declines in next-generation sequencing and the impact of project timing in our plasmid business. During the quarter, IDT opened a new manufacturing facility at their Coralville, Iowa campus, which enables the team to manufacture differentiated new offerings such as rapid gene synthesis. This is the second facility expansion for IDT within the last 12 months, and provides the capacity needed to support the rapidly expanding global DNA synthesis market and related drug development activities.
Now, moving over to our Diagnostics segment. Core revenue increased 3%. Our Clinical Diagnostics businesses collectively delivered mid-single digit core revenue growth, led by high single-digit growth at Radiometer. Like our Biosystems was up mid-single digits with notable strength in digital pathology, driven by Aperio GT 450 diagnostics digital pathology slide scanner, which recently received its FDA 510(k) clearance. Beckman Coulter Diagnostics was up low-single digits with balanced strength across both developed and high-growth markets. Now in May, Beckman received FDA 510(k) clearance of its The Access NT-proBNP on the DxI 9000 Immunoassay Analyzer. This important expansion of Beckman's cardiac testing menu allows clinicians to quickly and accurately diagnose and assess the condition severity of patients suspected of having acute heart failure. Now this clearance is just the latest confirmation of the DxI 9000 platform's capability to develop increasingly more sensitive and clinically-relevant diagnostics.
In molecular diagnostics, Cepheid's respiratory revenue of approximately $300 million in the quarter exceeded our expectation of $200 million, driven by both higher volumes and a favorable mix of our four-in-one tests for COVID-19, Flu A and B and RSV. So, we continue to expect respiratory revenue of approximately $1.6 billion for the full-year 2024. Now, as I mentioned earlier, we believe the Cepheid team continue to gain market share during the quarter. Increasing menu adoption and system utilization helped drive mid-teens growth in our core non-respiratory reagent portfolio, including more than 20% growth in sexual health and virology assays. We also continue to expand our nearly 60,000 system installed base as many existing healthcare system and integrated delivery network customers are adding new instruments at sites further out in their networks and closer to patients.
In June, the FDA granted Cepheid marketing authorization for its Hepatitis C RNA test. Hepatitis C diagnosis has traditionally been a multi-step process requiring follow-up appointments and leading to treatment delays. With Cepheid's test, which is the first molecular base point-of-care test for Hepatitis C, patients can be tested and receive treatment during the same healthcare visit. So this is a great example of how bringing accurate easy-to-use molecular testing closer to patients is improving treatment outcomes and driving long-term growth at Cepheid.
Now before we move on to our expectations for the remainder of the year, I'd like to highlight our recently released 2024 sustainability report, which details several important milestones across the three pillars of our sustainability program, starting with building the best team, innovating products that improve lives and our planet and protecting our environment. Notably, we have committed to setting science-based greenhouse gas emission reduction targets in line with the Science Based Targets initiative, including reaching net-zero value chain emissions by 2050. So I encourage you all to read through the report to learn more about the depth and scope of Danaher's commitment to sustainability and the important work we're doing to make a positive holistic impact on the world around us.
So now let's briefly look ahead at expectations for the third quarter and the full-year 2024. In the third quarter, we expect core revenue to decline in the low-single digit percent range. Additionally, we expect a third quarter adjusted operating profit margin of approximately 26%. For the full-year 2024, there is no change to our previous guidance. 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 to wrap up, we're pleased with our better than expected second quarter results and are encouraged by the continued momentum in our Bioprocessing business. Our strong performance is a testament to our team and their commitment to innovating and executing with the Danaher Business System. And they have done a tremendous job navigating the current environment to support our customers' life-changing work today, while also delivering breakthrough innovation that is reinforcing our long-term competitive advantage. The transformation in our portfolio over the last several years has created a focused life sciences and diagnostic leader positioned for higher long-term growth, expanded margins, and stronger cash flow. And our recent share repurchases reflect our conviction in a bright future ahead for Danaher.
So looking ahead, the unique combination of our incredibly talented team, the strength and differentiation of our portfolio, and a leading financial profile provides us with a strong foundation to create sustainable, long-term shareholder value. And with that, I'll turn the call back to John.
