Danaher Corporation ( DHR Quick Quote 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.