Revvity trims 2025 profit forecast on soft demand for diagnostics in China

Revvity (RVTY.N) lowered its 2025 adjusted profit forecast to $4.85-$4.95 per share from a prior $4.90-$5.00, citing soft demand for diagnostics products, particularly a double-digit decline in China, which sent shares down 8% premarket. This outlook contrasts with peers like Thermo Fisher and Danaher, which recently raised their forecasts, highlighting Revvity's specific challenges in key international diagnostics markets despite strong second-quarter life sciences product sales that exceeded estimates.

Analysis

Revvity has lowered its full-year 2025 adjusted profit forecast to a range of $4.85-$4.95 per share, down from its previous guidance of $4.90-$5.00, prompting an 8% premarket share price decline. The revision is attributed to persistent soft demand for its diagnostics products, highlighted by a double-digit sales decline in the key Chinese market during the second quarter. This negative outlook is company-specific and contrasts sharply with peers like Thermo Fisher Scientific and Danaher, which recently raised their annual profit forecasts, suggesting Revvity's challenges are not indicative of a broader industry downturn. Adding to the headwinds is a previously flagged potential $135 million impact from China tariffs, which the company is attempting to mitigate through supply chain adjustments. While the profit guidance disappoints, the company's life sciences segment demonstrated resilience, with second-quarter sales of $365.9 million surpassing estimates of $353.9 million. Furthermore, Revvity slightly increased its full-year revenue forecast to $2.84-$2.88 billion, though this is primarily attributed to favorable currency movements from a weaker U.S. dollar rather than fundamental operational growth.

Key Decisions for Investors

• Investors should scrutinize Revvity's specific exposure to the Chinese diagnostics market and the ongoing impact of tariffs, as these appear to be idiosyncratic risks not shared by key industry peers.
• The stark divergence in guidance between Revvity and competitors like Thermo Fisher and Danaher may present a relative value or pairs trading opportunity for those bullish on the life sciences tools sector but bearish on Revvity's specific challenges.
• While the profit warning is a significant concern, the outperformance in the life sciences division indicates underlying strength; investors should monitor if this segment's growth can materially offset the persistent weakness in diagnostics.