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Revvity Lowers Profit Forecast Amid China Diagnostics Challenges

Revvity Inc. has adjusted its financial outlook downward following its second-quarter 2025 earnings report, which revealed a decline in profit projections. The Massachusetts-based life science tools manufacturer reported sales of $720.28 million for the quarter, marking an increase from $691.69 million a year earlier and exceeding the consensus estimate of $710.71 million.

Despite the sales increase, the company’s adjusted earnings per share stood at $1.18, surpassing the expected $1.14. However, adjusted operating income fell to $192 million, down from $199 million in the same quarter last year, and the adjusted operating profit margin decreased to 26.6% from 28.8%.

Financial Performance and Market Challenges

Revvity’s life sciences segment reported a revenue increase of 5%, or 4% organically, reaching $366 million. This growth was notably driven by a 30% increase in the Signals Software franchise. Meanwhile, diagnostics sales rose by 3% year-over-year to $354 million, with organic diagnostics revenue increasing by 2%. The immunodiagnostics franchise faced tougher comparisons, limiting its growth to low single digits.

Despite these positive figures, Revvity has revised its profit outlook for the fiscal year 2025. The company lowered its adjusted earnings forecast from a range of $4.90-$5.00 per share to $4.85-$4.95, slightly below the consensus of $4.93. Conversely, Revvity raised its sales guidance from $2.83 billion-$2.87 billion to $2.84 billion-$2.88 billion, which aligns with the consensus of $2.85 billion.

The company anticipates full-year organic growth between 2% and 4%, a reduction of 1% from previous estimates, with reported growth projected at 3% to 5%.

Impact of Policy Changes in China

During the investor earnings call, Revvity’s CEO, president, and director, Prahlad Singh, highlighted ongoing macroeconomic challenges impacting the company. He stated, “The dynamic macro and market environment we experienced during the first quarter of the year continued through the second quarter and at this point does not yet appear to be settling down as we enter the second half of the year.”

A significant challenge identified by Revvity stems from a recent policy change in China regarding hospital laboratory reimbursement rules. The introduction of Diagnosis-Related Groups (DRG) is expected to influence the volume of diagnostic panels ordered by physicians, leading to a “fairly meaningful pullback” in the company’s immunodiagnostics business in that market.

The immunodiagnostics segment in China, which accounts for approximately 6% of Revvity’s total revenue, is now forecasted to see a decline in the high teens percentage for the full year. This adjustment is a primary factor behind the company’s revised overall outlook.

As of the latest trading session, Revvity’s stock has dropped by 9.98% to $93.32. The adjustments in earnings guidance, coupled with the implications of the policy changes in China, underscore the challenges Revvity faces in the current market landscape.

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