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Danaher's (DHR) Q3 Earnings Beat, Up Y/Y on Higher Sales
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Danaher Corporation’s (DHR - Free Report) third-quarter 2022 adjusted earnings (excluding 46 cents from non-recurring items) of $2.56 per share surpassed the Zacks Consensus Estimate of $2.24. The bottom line increased 7.1% from the year-ago quarter primarily on sales growth.
Danaher’s net sales of $7,663 million outperformed the Zacks Consensus Estimate of $7,092 million and increased 6% year over year. Results were driven by solid segmental performances. Organic sales in the quarter increased 10%, while acquisitions/divestitures boosted sales by 1.5%. Foreign-currency translations had an adverse impact of 5.5% on quarterly sales.
The pandemic-induced demand for products boosted sales 1.5%, while base business core sales (adjusted) growth was 8.5% in the quarter.
Danaher Corporation Price, Consensus and EPS Surprise
Revenues from the Life Sciences segment totaled $3,776 million, rising 4% year over year. Acquisitions/divestments contributed 2.5% to sales growth, while unfavorable foreign-currency translations lowered sales by 6.5%. Core sales grew 8% year over year.
Revenues from the Diagnostics segment grossed $2,679 million, increasing 9.5% year over year. The improvement came on the back of a 13.5% rise in core sales. Acquisitions/divestments led to 0.5% improvement in sales. Foreign-currency woes affected sales by 4.5%.
Revenues from the Environmental & Applied Solutions segment totaled $1,208 million, up 5% year over year. Core sales expanded by 10.5%, while foreign-currency translation had a negative impact of 5.5%.
Margin Profile
In the third quarter, Danaher’s cost of sales increased 7.3% year over year to $3,079 million. Gross profit of $4,584 million grew 5.2% year over year. Gross margin deteriorated to 59.8% in the reported quarter from 60.3% in the year-ago period.
Selling, general and administrative expenses of $2,149 million witnessed a year-over-year increase of 4.2%. Research and development expenses were $420 million, down 4.8%.
Operating profit in the quarter under review jumped 53.9% year over year to $2,015 million. Operating margin increased 820 basis points to 26.3% in the quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and cash equivalents of $5,150 million compared with $2,586 million at the end of 2021. Long-term debt was $18,542 million at the end of the reported quarter compared with $22,168 million at the end of December 2021.
Danaher generated net cash of $5,978 million from operating activities (continuing operations) in the first nine months of 2022, reflecting a year-over-year decrease of 0.9%. Capital expenditures totaled $823 million in the same period, down 5.8% year over year. Adjusted free cash flow (continuing operations) was $1,733 million in the third quarter compared with $1,716 million in the year-ago period.
DHR paid out dividends worth $615 million to its shareholders in the first nine months of 2022, up 11.6% on a year-over-year basis.
Q4 Outlook
For the fourth quarter, Danaher expects adjusted base business core revenue growth in the high-single-digit percent range.
The company expects adjusted base business core revenue growth in the high-single digit percent range for 2022 as well. Previously, the same was expected to increase in mid-single digits.
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. Shares of the company have gained 11.5% in the past six months.
iRobot (IRBT - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four quarter earnings surprise of 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. Shares of the company have rallied 11.6% in the past six months.
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Danaher's (DHR) Q3 Earnings Beat, Up Y/Y on Higher Sales
Danaher Corporation’s (DHR - Free Report) third-quarter 2022 adjusted earnings (excluding 46 cents from non-recurring items) of $2.56 per share surpassed the Zacks Consensus Estimate of $2.24. The bottom line increased 7.1% from the year-ago quarter primarily on sales growth.
Danaher’s net sales of $7,663 million outperformed the Zacks Consensus Estimate of $7,092 million and increased 6% year over year. Results were driven by solid segmental performances. Organic sales in the quarter increased 10%, while acquisitions/divestitures boosted sales by 1.5%. Foreign-currency translations had an adverse impact of 5.5% on quarterly sales.
The pandemic-induced demand for products boosted sales 1.5%, while base business core sales (adjusted) growth was 8.5% in the quarter.
Danaher Corporation Price, Consensus and EPS Surprise
Danaher Corporation price-consensus-eps-surprise-chart | Danaher Corporation Quote
Segmental Discussion
Revenues from the Life Sciences segment totaled $3,776 million, rising 4% year over year. Acquisitions/divestments contributed 2.5% to sales growth, while unfavorable foreign-currency translations lowered sales by 6.5%. Core sales grew 8% year over year.
Revenues from the Diagnostics segment grossed $2,679 million, increasing 9.5% year over year. The improvement came on the back of a 13.5% rise in core sales. Acquisitions/divestments led to 0.5% improvement in sales. Foreign-currency woes affected sales by 4.5%.
Revenues from the Environmental & Applied Solutions segment totaled $1,208 million, up 5% year over year. Core sales expanded by 10.5%, while foreign-currency translation had a negative impact of 5.5%.
Margin Profile
In the third quarter, Danaher’s cost of sales increased 7.3% year over year to $3,079 million. Gross profit of $4,584 million grew 5.2% year over year. Gross margin deteriorated to 59.8% in the reported quarter from 60.3% in the year-ago period.
Selling, general and administrative expenses of $2,149 million witnessed a year-over-year increase of 4.2%. Research and development expenses were $420 million, down 4.8%.
Operating profit in the quarter under review jumped 53.9% year over year to $2,015 million. Operating margin increased 820 basis points to 26.3% in the quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and cash equivalents of $5,150 million compared with $2,586 million at the end of 2021. Long-term debt was $18,542 million at the end of the reported quarter compared with $22,168 million at the end of December 2021.
Danaher generated net cash of $5,978 million from operating activities (continuing operations) in the first nine months of 2022, reflecting a year-over-year decrease of 0.9%. Capital expenditures totaled $823 million in the same period, down 5.8% year over year. Adjusted free cash flow (continuing operations) was $1,733 million in the third quarter compared with $1,716 million in the year-ago period.
DHR paid out dividends worth $615 million to its shareholders in the first nine months of 2022, up 11.6% on a year-over-year basis.
Q4 Outlook
For the fourth quarter, Danaher expects adjusted base business core revenue growth in the high-single-digit percent range.
The company expects adjusted base business core revenue growth in the high-single digit percent range for 2022 as well. Previously, the same was expected to increase in mid-single digits.
Zacks Rank & Key Picks
Danaher currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies are discussed below:
Enerpac Tool Group (EPAC - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four quarter earnings surprise of 3.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. Shares of the company have gained 11.5% in the past six months.
iRobot (IRBT - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four quarter earnings surprise of 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. Shares of the company have rallied 11.6% in the past six months.