) reported adjusted earnings of 93 cents a share in second-quarter
2014, which missed the Zacks Consensus Estimate by a penny.
However, the adjusted earnings increased 6.9% compared with the
prior-year figure of 87 cents per share. The company's GAAP
earnings came in at 95 cents per share including 2 cents related to
gain on the sale of marketable securities.
Danaher Corporation - Quarterly EPS (BNRI) |
The increase in bottom-line was mainly attributable to its core
revenue growth driven by the company's operating culture- Danaher
Business System. The system has been has been augmenting its
margins and cash flow effectively. Specific initiatives for new
product development and increased organic investments were other
positives for the company. Additionally, Danaher has a strong
balance sheet and over $8 billion of acquisition capacity that is
likely to drive growth going forward.
For the quarter, Danaher reported total sales of $4,963.6
million, an increase of 5% year over year. Core revenues for the
quarter were up 3% year over year, while revenues from acquisitions
were up 1.5%, partially offset by unfavorable currency translation
effects of 0.5%. Reported revenues fell marginally short of the
Zacks Consensus Estimate of $4968.0 million.
Danaher's gross margin expanded 10 basis points (bps) to 52.8%.
The company's operating margin also increased 10 bps to 17.9% in
Revenues in the
Test & Measurement
segment remained flat year over year at $857 million. The segment
operating margin decreased 250 bps to 18.4% compared with the
Revenues in the
segment were up 6% to $876 million. The segment reported operating
margin of 21.0%, a decline of 60 bps from last year's margin.
Life Sciences and Diagnostics
revenues were up 7% year over year to $1,790 million. The operating
margin for the quarter was up 140 bps year over year to 15.8%.
Revenues from the
segment grew 2.5% year over year to $528 million with operating
margin declining 50 bps to 14.8%.
segment, revenues grew 5.5% to $913 million, while the operating
margin increased 30 bps to 23.8% on a year-over-year basis.
Balance Sheet & Cash Flow
Danaher exited the second quarter with cash and equivalents
balance of $3,321.1 million versus $3,115.2 million as on Dec 31,
2013. The company had a long-term debt of $3,020.0 million at the
end of the reported quarter, down from $3,436.7 million as on Dec
Danaher's cash flow from operating activities increased to $992
million from $899 million in the prior-year period. The company's
free cash flow also increased to $844 million from $763 million in
On Jul 16, Danaher announced that its Beckman Coulter division
will be acquiring the clinical microbiology business of Siemens
Healthcare Diagnostics for an undisclosed amount. The acquisition
is expected to have strong operational synergies for Beckman
Coulter's Diagnostics business. The acquisition will be expanding
Danaher's product portfolio by offering differentiated analytical
systems and menu including the crucial ID/AST solutions for their
existing solutions. This is expected to significantly enhance the
clinical offerings while improving patient care. The deal is
expected to close in the first quarter of 2015.
Concurrent with the earnings release, management provided its
guidance for third-quarter and full-year 2014 revenues and
The company has narrowed the guidance for full-year 2014 GAAP
earnings in the range of $3.67 to $3.72 per share compared with
$3.60 to $3.75 per share projected earlier. For the third quarter
of 2014, the company's GAAP earnings are expected to be in the
range of 86 cents to 89 cents a share.
Danaher currently carries a Zacks Rank #3 (Hold). Some other
stocks in the same sector worth considering include
Hutchison Whampoa Limited
Merchants Holdings (International) Company Limited
). All these stocks carry a Zacks Rank #2 (Buy).
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