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Danaher Reports Strong Results; Improves Guidance

Science and technology company, Danaher Corp. (NYSE: DHR – $103.13) announced third quarter results with net earnings of $663.7 million. Adjusted earnings per share for the period was $1.10, two cents above Street expectations and 10% above a year ago. Revenues increased 7.0% year-over-year to $4.9 billion. Danaher achieved 6.5% core revenue growth, solid operating margin expansion and double-digit adjusted earnings per share growth as four of the company’s business segments delivered mid-single digit or better revenue growth on market shares gains. The Life Sciences segment grew revenue 14.5%; Diagnostics 3.5%; Environmental & Applied Solutions 8%; offsetting a revenue decline in the Dental segment of 2%. Free cash flow year-to-date was higher by 5% from last year to nearly $2.35 billion.

       For the fourth quarter 2018, the Washington, DC-based firm anticipates adjusted earnings per share in the range of $1.25 to $1.28 and for the full year, management is increasing its earnings guidance to $4.49 to $4.52, up from $4.43 to $4.50, bracketing the Street estimate of $4.50.

       The investment community is anticipating a sizable purchase in the coming six months or so. After big splashes in 2015 and 2016 (Pall and Cepheid, respectively), management took a breather from its torrid acquisition pace last year. Cash on hand has been building and the high valuation for DHR stock appears ripe for a major purchase. Positions in Danaher, up 23% in past twelve months, can continue to be maintained.

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