Conservative · Stocks to Consider and Updates

Danaher Meets Expectations; Outlook In-Line

Danaher Corp. (NYSE: DHR – $105.27) said results for the fourth quarter saw net earnings settle at $746.8 million and adjusted earnings per share at $1.28 – a penny shy of consensus. The results represent a 7.5% increase over the comparable 2017 period of $1.19. Revenues increased 5.5% year-over-year to $5.4 billion, ahead of the $5.33 billion analysts were expecting. For the full year 2018, net earnings were $2.7 billion and adjusted earnings per share was $4.52, which represents a 12.0% increase over the comparable 2017 amount. Revenues for the full year increased 8.5% to $19.9 billion and the company generated operating cash flow of $4.0 billion, which represents a 15.5% year-over-year increase.

       For the first quarter of 2019, the Washington, DC-based company anticipates that adjusted earnings per share will be in the range of $1.00 to $1.03, in line with Street estimates. For the full year 2019, management predicts that adjusted earnings per share on an adjusted basis will be in the range of $4.75 to $4.85, which compares to 2018’s figure of $4.52 and also in the range of Street expectations.

       Danaher, which designs, manufactures and markets professional, medical, industrial and commercial products and services, plans to spin-off its dental business this year. In both 2015 and 2016, the company made sizable (north of $4 billion) purchases. Then, in 2017, less than $400 million worth of new assets were acquired, and no truly large expenditures to bolster the portfolio came on-line in 2018. With all this in mind, the Danaher Business System needs to be fed and cash is climbing. Adding a new bolt-on acquisition to the portfolio is now a possibility, given the spin out news. Holdings in Danaher can be considered for conservative investors willing to sacrifice dividends, as the shares yield about 0.6%.

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