Danaher Beats Estimates - Analyst Blog

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Danaher Corporation ( DHR ) released its fourth-quarter and fiscal 2011 results reporting GAAP earnings from continuing operations of 79 cents, a penny above the Zacks Consensus Estimate of 78 cents.

Non-Gaap earnings were 81 cents a share, which was also above the Zacks Consensus Estimate and was up 26.5% year over year.

For the full year on GAAP basis earnings were $2.53 a share while on a non-GAAP basis it was $2.83 a share which was 28.5% above fiscal 2010. The company's restructuring and structural cost actions have made it possible for the company to achieve record fourth quarter results.


Revenue

For the fourth quarter, the company generated sales of $4.7 billion, an increase of 37.4% year over year. Core revenue for the quarter was up 4%. The impact of acquisitions, primarily the acquisition of Beckman Coulter increased revenues by 33.5% for the quarter. Danaher continues to benefit from product innovations and its go-to-market initiatives.

Test & Measurement revenue increased 7% for the quarter, with core revenues up 2.5%, Environmental revenue surged 8.5% during the quarter, with core revenues up 5.5%. Life Sciences & Diagnostics division had a strong quarter with revenues increasing 153.5% year over year (driven by the Coulter's acquisition, which is not taken as core yet), while the core revenues were up 6%.

Dental revenues grew 5.5% year over year with core revenues up 2.5%. Revenues in the Industrial Technology segment increased 15% while core revenues was up 3%.

Margin

For the fourth quarter, gross margin decreased 250 basis points to 49.3% while the Operating margin in the quarter contracted 80 basis points to 16.5%. The decline in both margins was primarily due to the incremental year-over-year restructuring activity and the impact of non-cash acquisition-related costs and lower margins at Beckman Coulter.

Operating margin in Test & Measurement increased to 21.5%, for the Environmental segment margin marginally increased to 21.9%, Life Sciences & Diagnostics was down 10 basis points to 13%, Dental was down 120 basis points to 10.9% and Industrial Technologies margin also declined 70 basis points to 18.1%.

Balance Sheet and Cash Flow

The company exited the year with cash and cash equivalents of $537 million and a debt equity ratio of 23.5%.

Outlook

The company's result for the quarter is quite impressive as its performance gained momentum in all business segments. Led by good fourth-quarter and full year 2011 performance and improving market condition, Danaher stated that it expects first quarter earnings to be in the range of 66 cents to 71 cents and reaffirmed its full year guidance in the range of $3.20 to $3.35 a share.  

Danaher currently has a Zacks Rank #3 which implies short term 'Hold' rating on the stock.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

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