(DHR) Danaher Short on Earnings – Revenues Up

Danaher Corporation (DHR) reported diluted earnings of 75 cents a share from continuing operations in the first quarter of 2013, a 2.5% growth from year-over- year earnings but missing the Zacks Consensus Estimate of 76 cents by a penny. However, this was well within management’s expectation.

In the first quarter, the company gained from selling the Apex Tool Group LLC joint venture and also other discrete tax benefits. Including these gains Net Diluted Earnings on a GAAP basis were $691.9 million, or 98 cents per share up 34% from the prior-year earnings of 73 cents per share. Gains from the sale of Apex tool group LLC were 20 cents per share, while gains from federal tax provisions and other discrete items were 3 cents per share.


The company generated total sales of $4.4 billion in the quarter, up 3% year over year. Core revenues for the quarter were up 1%. The increase in revenues was primarily attributable to global growth factors.


The company’s Operating Profit was $731 million down by 0.5% from year over margin of $735 million. The company was able to achieve organic growth and margin expansion driven by its Danaher Business System (DBS).

DBS also helped in timely cash flow generation. Operating cash flow for the quarter was $636 million. Multiple accretive acquisitions over the past few quarters were also responsible for fueling further growth for the company.


Revenues in the Test & Measurement segment edged up by 1% to $855 million. The segment recorded an operating margin of 21.9% a decline of 0.7% from prior year level of 22.6%.

Environmental revenues grew 4.5% during the quarter to $725 million. The segment reported an operating profit margin of 18.6%, same as that of its previous year level.

Life Sciences and Diagnostics reported a revenue increase of 1.5% year over year to $1.5 million. The operating profit margin for the quarter was down 0.6% year over year to 12.7%.

Revenues from the Dental segment grew 3% year over year to $480 million with operating profit margin growing 0.4% year over year to 13.1%.

In the Industrial Technologies segment, revenues grew 7% to $817 million with operating margin growth of 0.3%. This strong revenue growth was mainly driven by Acquisition effects.


Concurrent with the earnings release, management provided its guidance for second quarter and full year 2013. Danaher expects to experience continued growth in the global front during the remaining part of the year.

The company reaffirmed its previously announced full year 2013 earnings in the range of $3.32 to $3.47 a share. For the second quarter of 2013, the company’s expectations are in the range of 80 cents to 85 cents a share.

Danaher currently carries a Zacks Rank #3 (Hold). Other companies in the industry like Crane Co. (CR), Honeywell International (HON) and Carlisle Companies Incorporated (CSL), having a Zacks Rank #2 (Buy) each, are worth considering.

CRANE CO (CR): Free Stock Analysis Report

CARLISLE COS IN (CSL): Free Stock Analysis Report

DANAHER CORP (DHR): Free Stock Analysis Report

HONEYWELL INTL (HON): Free Stock Analysis Report

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