Back to top

Image: Bigstock

Danaher Issues '18 View Ahead of Investor & Analyst Meeting

Read MoreHide Full Article

Danaher Corporation (DHR - Free Report) recently initiated outlook for 2018, ahead of its annual investor and analyst meeting scheduled to be held in New York City. The company projects diluted net earnings per share in the range of $3.50 to $3.60.

Danaher currently expects 2018 adjusted earnings per share in the band $4.25–$4.35, assuming non-GAAP core revenue growth in the range of 3.5-4%. The company is enjoying meaningful growth and margin expansion opportunities across its portfolio, along with solid momentum in its recent Cepheid, Pall and Nobel acquisitions. Danaher’s results should benefit from these factors in 2018.

The company reported robust third-quarter 2017 results, primarily owing to its Danaher Business System (“DBS”) that focuses on three critical areas -- quality, delivery, and cost & innovation.

The company has had an impressive 2017 so far, delivering core growth acceleration, operating margin expansion as well as double-digit growth in earnings. Moreover, the company’s recent acquisitions continue to perform impressively, which have helped it improve productivity and drive growth. These factors should have a positive impact on the company’s operations, going into 2018.

Our Take

Leveraging on DBS, the company has consistently driven gross and operating margin growth, lower general and administrative expense, and higher investments  in Research & Development along with sales and marketing. Notably, the company has returned 9.9% in the past six months, against the industry’s loss of 8.8%.

In third-quarter 2017, DBS contributed significantly to the company’s year-over-year core revenue growth, adjusted earnings per share improvement, strong margin expansion and robust free cash flow. In the reported quarter, gross margins were up 70 basis points to 56%. It also helped to drive share gains in a number of operating units and reinvestment in strategic businesses to boost long-term growth. Going forward, the company remains confident that DBS will unlock multiple opportunities to bolster margin growth.

The company has successfully repositioned itself as a healthcare company, broadening its presence in the healthcare and dental markets, which are expected to benefit from the rise in the aging population and increased spending on healthcare and fitness. Additionally, lucrative prospects in pharma and clinical end-markets bode well.

During 2016, the Zacks Rank #2 (Buy) company closed eight acquisitions across all five platforms for nearly $5 billion, which has contributed significantly to Danaher’s growth this year. We believe that strategic buyouts and positive industry trends will unlock a host of opportunities for Danaher, going forward. For instance, the company expects core growth rate to accelerate going forward, in light of improving order trends and recent acquisitions like Cepheid and Phenomenex.

Other Stocks to Consider

Some other top-ranked stocks from the same space include Hitachi Ltd. (HTHIY - Free Report) , Leucadia National Corporation and 3M Company (MMM - Free Report) . While Hitachi sports a Zacks Rank #1 (Strong Buy), Leucadia National and 3M Company carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hitachi has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 85.8%.

Leucadia National has surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 21.2%.

3M Company has outpaced estimates thrice in the preceding four quarters, with an average earnings surprise of 2.5%.

Investor Alert: Breakthroughs Pending

A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.

Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.

Click here to see them >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


3M Company (MMM) - free report >>

Danaher Corporation (DHR) - free report >>

Hitachi Ltd. (HTHIY) - free report >>

Published in