Revvity Slashes Outlook As China Policy Deals Diagnostics Blow

Revvity Inc. (NYSE:RVTY) stock is trading lower on Monday following the life science tools maker’s second-quarter 2025 earnings report, which also included a trimmed profit forecast for 2025.

The Massachusetts-based company announced second-quarter sales of $720.28 million, an increase from $691.69 million reported a year ago, surpassing the consensus estimate of $710.71 million.

Delving into the financials, the company’s adjusted earnings for the second quarter were $1.18, exceeding the consensus of $1.14. However, adjusted operating income decreased to $192 million from $199 million in the same period last year, and the adjusted operating profit margin also saw a decline to 26.6% compared to 28.8% a year ago.

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The company’s life sciences segment saw revenue increase by 5% (+4% organically) to $366 million, led by approximately 30% growth in the Signals Software franchise.

Diagnostics sales increased 3% year-over-year to $354 million, and organic diagnostics revenue increased 2%, in line with expectations, as immunodiagnostics franchise faced more difficult multiyear comparisons, limiting its growth to the low single digits this past quarter.

Outlook

Revvity lowered its fiscal year 2025 adjusted earnings from $4.90-$5.00 per share to $4.85-$4.95 per share compared to the consensus of $4.93.

The company raised its 2025 sales guidance from $2.83 billion-$2.87 billion to $2.84 billion-$2.88 billion, versus the consensus of $2.85 billion.

View more earnings on RVTY

Revvity expects 2025 full-year organic growth to be in the 2% to 4% range, down 1% from the prior outlook, with reported growth of 3%- 5%.

During the investor earnings call, Prahlad Singh, Revvity’s CEO, president, and director, acknowledged the persistent macroeconomic and market challenges. “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,” Singh stated.

A significant headwind identified by the company is a recent policy change in China concerning hospital laboratory reimbursement rules, specifically the implementation of Diagnosis-Related Groups (DRG).

This expanded policy shift is impacting the size of diagnostic panels ordered by physicians in China, initially leading to a reduction in overall volumes for some of Revvity’s multiplex products.

While this may eventually drive an increase in demand for more expensive single-plex tests, which Revvity also offers, the immediate effect is a “fairly meaningful pullback” in the company’s immunodiagnostics business in China.

Singh elaborated on the impact, noting that the immunodiagnostics business in China, which accounts for approximately 6% of Revvity’s total revenue, is now projected to experience a high-teen percentage decline for the full year. This revised forecast for the critical China market is the primary driver behind Revvity’s adjusted overall company outlook.

Price Action: Revvity stock is trading lower by 9.98% to $93.32 at last check Monday.

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This article Revvity Slashes Outlook As China Policy Deals Diagnostics Blow originally appeared on Benzinga.com