Conservative · Stocks to Consider and Updates

Danaher Beats Estimates; Guidance Disappoints

  Danaher Corp. (NYSE: DHR – $83.76) provided a downbeat second quarter forecast, but maintains its full-year 2017 earnings per share outlook. Traders brought the shares down about 3% from yesterday’s close on the news. For the second quarter Danaher anticipates that adjusted earnings per share will be in the range of $0.95 to $0.98, below the $0.99 the Street was anticipating. For the full year 2017, the company anticipates adjusted earnings to be in the range of $3.85 to $3.95 per share, on the low-end of analysts’ views. However, management has a history of being conservative with its forecasts.

       For the first quarter Danaher reported stronger-than- expected sales and earnings per share. EPS was $0.85 vs. $0.79 a year ago and a penny ahead of consensus. Revenues increased 7.0% year-over-year to $4.2 billion, with core revenue growth of 2.5% and a bit better than what Wall Street was looking for. Integration-related expenses from recent acquisitions caused earnings to decline 18% in the latest quarter, although earnings rose 8% on an adjusted basis.

       Following last year’s spin-off of its industrial businesses, the “new” Danaher now concentrates in four high-growth segments: Environmental & Applied Solutions, Dental, Life Sciences and Diagnostics, with notable brands such as Nobel Biocare, Pall, Beckman Coulter, Leica Biosystems and ChemTreat. The shares, up over 20% in the past 52-weeks, remain a core conservative holding.

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