We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Danaher Corporation’s (DHR - Free Report) third-quarter 2023 adjusted earnings (excluding 51 cents from non-recurring items) of $2.02 per share surpassed the Zacks Consensus Estimate of $1.83. However, the bottom line declined 21.1% year over year.
Danaher’s net sales of $6,873 million outperformed the consensus estimate of $6,611.7 million. However, it declined 10.3% year over year due to a decrease in the sale of COVID-related products and weak demand in the Life Sciences segment.
Organic sales in the quarter decreased 11.5%. Foreign-currency translations had a positive impact of 0.5% on quarterly sales. Base business core sales (adjusted) declined 3% in the quarter.
Danaher Corporation Price, Consensus and EPS Surprise
Revenues from the Life Sciences segment totaled $1,706 million, down 1% year over year. Core sales dipped 2.5% year over year. Acquisitions/divestitures led to a 1% increase in sales. Operating profit was $313 million for the quarter, down 11.6% year over year. We expected the Life Sciences segment operating profit to be $309.7 million. 2
Revenues from the Diagnostics segment grossed $2,254 million, down 15.9% year over year. Our estimate for the quarter was $2,230.9 million. The downside was due to a 15.5% decline in core sales. Foreign-currency woes affected sales by 0.5%. Operating profit was $539 million for the quarter, down 29.2% on a year-over-year basis.
Revenues from the Environmental & Applied Solutions segment totaled $1,249 million, up 3.5% year over year. Our estimate for the quarter was $1,226.1 million. Core sales expanded 1%. Acquisitions/divestitures boosted sales by 0.5%. Operating profit was $286 million for the quarter, flat year over year. Our estimate for the quarter was $210 million.
Revenues from the Biotechnology segment totaled $1,664 million, down 19% year over year. Our estimate for the quarter was $1,635.6 million. Core sales dropped 21% for the segment. Operating profit was $417 million for the quarter, down 39.6% year over year. Our estimate for the quarter was $459.4 million.
Margin Profile
In the third quarter, Danaher’s cost of sales decreased 6.7% year over year to $2.87 billion. Gross profit of $4 billion fell 12.7% year over year. Gross margin in the quarter was 58.2% compared with 59.8% in the year-ago quarter.
Selling, general and administrative expenses of $2,145 million were flat on a year-over-year basis. Research and development expenses were $417 million, down nearly 1% year over year.
Danaher’s operating profit in the quarter under review dropped 28.6% year over year to $1,438 million. Operating margin decreased to 20.9% from 26.3% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and equivalents of $12,277 million compared with $5,995 million at 2022-end. Long-term debt was $19,513 million at the end of the reported quarter compared with $19,086 million at the end of December 2022.
Danaher generated net cash of $5,545 million from operating activities at the end of the third quarter compared with $5,978 million in the year-ago period. Capital expenditures totaled $981 million in the same period, up 19.2% year over year. Adjusted free cash flow was $4,572 million at the end of the third quarter compared with $5,164 million at the end of the year-ago period.
In the first nine months of 2023, DHR paid out dividends of $621 million, up around 1% on a year-over-year basis.
Outlook
For the fourth quarter of 2023, Danaher expects adjusted base business core revenues from continuing operations to decline in mid-single digits on a year-over-year basis. The same is anticipated to decrease slightly on a year-over-year basis in 2023.
Applied Industrial has an estimated earnings growth rate of 4.3% for the current fiscal year. The stock has gained 33.4% in a year.
Axon Enterprise (AXON - Free Report) carries a Zacks Rank #2 (Buy) at present. The company pulled off a trailing four-quarter earnings surprise of 60.2%, on average.
Axon has an estimated earnings growth rate of 62.1% for the current year. The stock has surged around 52.4% in a year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Danaher's (DHR) Q3 Earnings & Revenues Beat, Decline Y/Y
Danaher Corporation’s (DHR - Free Report) third-quarter 2023 adjusted earnings (excluding 51 cents from non-recurring items) of $2.02 per share surpassed the Zacks Consensus Estimate of $1.83. However, the bottom line declined 21.1% year over year.
Danaher’s net sales of $6,873 million outperformed the consensus estimate of $6,611.7 million. However, it declined 10.3% year over year due to a decrease in the sale of COVID-related products and weak demand in the Life Sciences segment.
Organic sales in the quarter decreased 11.5%. Foreign-currency translations had a positive impact of 0.5% on quarterly sales. Base business core sales (adjusted) declined 3% 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 $1,706 million, down 1% year over year. Core sales dipped 2.5% year over year. Acquisitions/divestitures led to a 1% increase in sales. Operating profit was $313 million for the quarter, down 11.6% year over year. We expected the Life Sciences segment operating profit to be $309.7 million. 2
Revenues from the Diagnostics segment grossed $2,254 million, down 15.9% year over year. Our estimate for the quarter was $2,230.9 million. The downside was due to a 15.5% decline in core sales. Foreign-currency woes affected sales by 0.5%. Operating profit was $539 million for the quarter, down 29.2% on a year-over-year basis.
Revenues from the Environmental & Applied Solutions segment totaled $1,249 million, up 3.5% year over year. Our estimate for the quarter was $1,226.1 million. Core sales expanded 1%. Acquisitions/divestitures boosted sales by 0.5%. Operating profit was $286 million for the quarter, flat year over year. Our estimate for the quarter was $210 million.
Revenues from the Biotechnology segment totaled $1,664 million, down 19% year over year. Our estimate for the quarter was $1,635.6 million. Core sales dropped 21% for the segment. Operating profit was $417 million for the quarter, down 39.6% year over year. Our estimate for the quarter was $459.4 million.
Margin Profile
In the third quarter, Danaher’s cost of sales decreased 6.7% year over year to $2.87 billion. Gross profit of $4 billion fell 12.7% year over year. Gross margin in the quarter was 58.2% compared with 59.8% in the year-ago quarter.
Selling, general and administrative expenses of $2,145 million were flat on a year-over-year basis. Research and development expenses were $417 million, down nearly 1% year over year.
Danaher’s operating profit in the quarter under review dropped 28.6% year over year to $1,438 million. Operating margin decreased to 20.9% from 26.3% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and equivalents of $12,277 million compared with $5,995 million at 2022-end. Long-term debt was $19,513 million at the end of the reported quarter compared with $19,086 million at the end of December 2022.
Danaher generated net cash of $5,545 million from operating activities at the end of the third quarter compared with $5,978 million in the year-ago period. Capital expenditures totaled $981 million in the same period, up 19.2% year over year. Adjusted free cash flow was $4,572 million at the end of the third quarter compared with $5,164 million at the end of the year-ago period.
In the first nine months of 2023, DHR paid out dividends of $621 million, up around 1% on a year-over-year basis.
Outlook
For the fourth quarter of 2023, Danaher expects adjusted base business core revenues from continuing operations to decline in mid-single digits on a year-over-year basis. The same is anticipated to decrease slightly on a year-over-year basis in 2023.
Zacks Rank & Stocks to Consider
Danaher presently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Industrial Products sector:
Applied Industrial Technologies (AIT - Free Report) flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 15%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Applied Industrial has an estimated earnings growth rate of 4.3% for the current fiscal year. The stock has gained 33.4% in a year.
Axon Enterprise (AXON - Free Report) carries a Zacks Rank #2 (Buy) at present. The company pulled off a trailing four-quarter earnings surprise of 60.2%, on average.
Axon has an estimated earnings growth rate of 62.1% for the current year. The stock has surged around 52.4% in a year.