Danaher Corporation (DHR - Free Report) has delivered impressive results for second-quarter 2021, with earnings surpassing estimates by 20.6%. Its sales exceeded the same by 7.8%.
Danaher’s adjusted earnings were $2.46 per share in the reported quarter, which surpassed the Zacks Consensus Estimate of $2.04. The bottom line increased 70.8% from the year-ago quarter’s figure of $1.44 mainly on sales growth and improved margins.
Revenue Details
In the quarter under review, the company’s net sales were $7,218 million, reflecting year-over-year growth of 36.5%. The results were driven by solid segmental performances. Organic sales in the quarter increased 31.5% and foreign-currency translations had a positive impact of 4%. Acquisitions/divestments boosted sales by 1%.
The pandemic-induced demand for products boosted sales by 14%. The company’s top line surpassed the Zacks Consensus Estimate of $6,694 million.
It reports net sales under three segments — Life Sciences, Diagnostics, and Environmental & Applied Solutions. The segmental information is briefly discussed below:
Revenues for the Life Sciences segment totaled $3,734 million, rising 41.5% year over year. Acquisitions/divestments had a positive contribution of 2% to sales growth, while foreign-currency translations boosted sales by 4.5%. Core sales grew 35% year over year.
Revenues in the Diagnostics segment grossed $2,336 million, increasing 40.5% year over year. The improvement came on the back of a 37% rise in core sales and a 3.5% gain from foreign-currency translations.
Revenues in the Environmental & Applied Solutions segment totaled $1,148 million, increasing 15.5% year over year. Core sales expanded 13% and foreign currency translation had a positive impact of 4%. Acquisitions lowered sales by 1.5%.
Margin Profile
In the quarter under review, Danaher’s cost of sales increased 15.4% year over year to $2,821 million. It represented 39.1% of net sales compared with 46.2% in the year-ago quarter. Gross profit of $4,397 million grew 54.2% year over year, while margin increased 710 basis points (bps) year over year to 60.9%.
Selling, general and administrative expenses of $1,966 million witnessed a year-over-year increase of 16.7%. As a percentage of net sales, it represented 27.2% versus 31.8% in the year-ago quarter. Research and development expenses were $426 million, which rose 31.9% year over year. It represented 5.9% of net sales versus 6.1% in the year-ago quarter.
Operating income in the quarter under review increased 137.6% year over year to $2,005 million. The operating margin increased 1190 bps to 27.8% in the quarter. Interest expenses in the quarter totaled $62 million, down 20.5% from the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the second quarter, Danaher had cash and cash equivalents of $7,322 million, up 15.7% from $6,330 million at the end of the last reported quarter. Long-term debt balance increased 0.7% sequentially to $20,400 million.
In the first half of 2021, the company repaid $279 million in borrowings, with a maturity of more than 90 days.
The company generated net cash of $3,991 million from operating activities (continuing operations) in the first half of 2021, reflecting a year-over-year increase of 75.7%. Capital used for purchasing property, plant and equipment totaled $556 million versus $288 million in the year-ago comparable period.
The company paid out dividends worth $360 million to its shareholders in the first six months of 2021, reflecting an increase of 27.2% from the previous year’s comparable period.
Outlook
For the third quarter of 2021, the company expects core revenue growth in mid to high-teens percentage. The same is predicted to increase in high-teens for 2021 as against mid-teens mentioned earlier.
Cytiva’s contribution to sales is anticipated to be in the low-single digits for the year. Including Cytiva, core sales are expected to grow 20% versus an increase in high-teens stated previously in 2021.
The COVID-related tailwinds are anticipated to boost sales in the high-single digits in the third quarter and by 10% in 2021.
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Danaher Corporation (DHR - Free Report) has delivered impressive results for second-quarter 2021, with earnings surpassing estimates by 20.6%. Its sales exceeded the same by 7.8%.
Danaher’s adjusted earnings were $2.46 per share in the reported quarter, which surpassed the Zacks Consensus Estimate of $2.04. The bottom line increased 70.8% from the year-ago quarter’s figure of $1.44 mainly on sales growth and improved margins.
Revenue Details
In the quarter under review, the company’s net sales were $7,218 million, reflecting year-over-year growth of 36.5%. The results were driven by solid segmental performances. Organic sales in the quarter increased 31.5% and foreign-currency translations had a positive impact of 4%. Acquisitions/divestments boosted sales by 1%.
The pandemic-induced demand for products boosted sales by 14%. The company’s top line surpassed the Zacks Consensus Estimate of $6,694 million.
It reports net sales under three segments — Life Sciences, Diagnostics, and Environmental & Applied Solutions. The segmental information is briefly discussed below:
Revenues for the Life Sciences segment totaled $3,734 million, rising 41.5% year over year. Acquisitions/divestments had a positive contribution of 2% to sales growth, while foreign-currency translations boosted sales by 4.5%. Core sales grew 35% year over year.
Revenues in the Diagnostics segment grossed $2,336 million, increasing 40.5% year over year. The improvement came on the back of a 37% rise in core sales and a 3.5% gain from foreign-currency translations.
Revenues in the Environmental & Applied Solutions segment totaled $1,148 million, increasing 15.5% year over year. Core sales expanded 13% and foreign currency translation had a positive impact of 4%. Acquisitions lowered sales by 1.5%.
Margin Profile
In the quarter under review, Danaher’s cost of sales increased 15.4% year over year to $2,821 million. It represented 39.1% of net sales compared with 46.2% in the year-ago quarter. Gross profit of $4,397 million grew 54.2% year over year, while margin increased 710 basis points (bps) year over year to 60.9%.
Selling, general and administrative expenses of $1,966 million witnessed a year-over-year increase of 16.7%. As a percentage of net sales, it represented 27.2% versus 31.8% in the year-ago quarter. Research and development expenses were $426 million, which rose 31.9% year over year. It represented 5.9% of net sales versus 6.1% in the year-ago quarter.
Operating income in the quarter under review increased 137.6% year over year to $2,005 million. The operating margin increased 1190 bps to 27.8% in the quarter. Interest expenses in the quarter totaled $62 million, down 20.5% from the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the second quarter, Danaher had cash and cash equivalents of $7,322 million, up 15.7% from $6,330 million at the end of the last reported quarter. Long-term debt balance increased 0.7% sequentially to $20,400 million.
In the first half of 2021, the company repaid $279 million in borrowings, with a maturity of more than 90 days.
The company generated net cash of $3,991 million from operating activities (continuing operations) in the first half of 2021, reflecting a year-over-year increase of 75.7%. Capital used for purchasing property, plant and equipment totaled $556 million versus $288 million in the year-ago comparable period.
The company paid out dividends worth $360 million to its shareholders in the first six months of 2021, reflecting an increase of 27.2% from the previous year’s comparable period.
Outlook
For the third quarter of 2021, the company expects core revenue growth in mid to high-teens percentage. The same is predicted to increase in high-teens for 2021 as against mid-teens mentioned earlier.
Cytiva’s contribution to sales is anticipated to be in the low-single digits for the year. Including Cytiva, core sales are expected to grow 20% versus an increase in high-teens stated previously in 2021.
The COVID-related tailwinds are anticipated to boost sales in the high-single digits in the third quarter and by 10% in 2021.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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