Danaher Profit Soars on Acquisitions; Ups Guidance

DHR  Industrial and scientific instrument manufacturer Danaher Corp. (NYSE: DHR – $95.99) raised its guidance for the year after reporting its profit shot up 33% in the first quarter and results topped expectations as recent acquisitions added to results despite currency challenges. For the year, the company now anticipates adjusted earnings of $4.85 to $4.98 a share, up from its previous forecast for $4.80 to $4.95, and better than Street estimates that are averaging around $4.88. But for the second quarter, the company – which tends to be conservative on forecasts – expects adjusted earnings in the range of $1.19 to $ 1.23 a share, just below analysts’ forecasts for $1.24. Acquisitions helped the Washington, D.C.-based company increase its top-line growth by 16.5%. Still, the company faced foreign-exchange volatility that it said reduced its top line by 2%. For the quarter ended April 1, the company posted a profit of $758.4 million, up from $569.8 million a year earlier. Excluding certain items, earnings on a per-share basis rose to $1.08 from $0.91 a year earlier and five cents ahead of Street views. Revenue climbed 15% to $5.39 billion vs. a consensus estimate of $5.33 billion.

       Danaher is still on track to split its industrial products divisions and medical segments into two, probably in the third quarter of this year. The split has created a bit on uncertainty, but the shares have performed well over the past year rising over 12% vs. a decline in the S&P 500 of about 1.2%. I will retain the shares in the conservative portfolio for now pending the split and reassess the values of the two new companies later this year.

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