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Danaher Corporation’s (DHR - Free Report) second-quarter 2024 adjusted earnings (excluding 50 cents from non-recurring items) of $1.72 per share surpassed the Zacks Consensus Estimate of $1.57. The bottom line declined 0.6% year over year.
Danaher’s net sales of $5.7 billion outperformed the consensus estimate of $5.6 billion. However, the metric declined 3% year over year due to lower core sales in the Biotechnology segment.
Organic sales decreased 3.5%. Acquisitions had a positive impact of 2% on quarterly sales while adverse foreign-currency translations lowered sales by 1.5%.
Segmental Discussion
On Sep 30, 2023, Danaher completed the separation of its Environmental & Applied Solutions segment. It currently operates under the operating segments discussed below.
Revenues from the Life Sciences segment totaled $1.8 billion, down 1.5% year over year. We expected the Life Sciences segment’s revenues to be $1.8 billion. Core sales dipped 5.5% year over year. Acquisitions/divestitures led to a 6% increase in sales. Operating profit was $233 million, down 31.5% year over year.
Revenues from the Diagnostics segment totaled $2.3 billion, up 1.5% year over year. Our estimate for revenues in the quarter was $2.2 billion. Core sales increased 3% year over year. Foreign currency had a negative impact of 1.5%. Operating profit was $556 million, up 31.1% on a year-over-year basis.
Revenues from the Biotechnology segment totaled $1.7 billion, down 7% year over year. Our estimate for the quarter was $1.6 billion. Core sales dropped 9% for the segment. Operating profit was $462 million, down 3.8% year over year.
Danaher Corporation Price, Consensus and EPS Surprise
In the second quarter, Danaher’s cost of sales increased 10.8% year over year to $2.3 billion. Gross profit of $3.4 billion increased 3.3% year over year. The gross margin in the quarter was 59.7% compared with 56.1% in the year-ago quarter.
Selling, general and administrative expenses of $1.9 billion recorded an increase of 4.2% on a year-over-year basis. Research and development expenses were $391 million, up 8.3% year over year.
Danaher’s operating profit increased 0.4% year over year to $1.2 billion. Operating margin increased to 20.3% from 19.7% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the second quarter, DHR had cash and equivalents of $2.4 billion compared with $5.9 billion in 2023 end. Long-term debt was $16.3 billion at the end of the quarter compared with $16.7 billion at the end of December 2023.
Danaher generated net cash of $3.2 billion from operating activities in the first six months of 2024 compared with $3.9 billion in the previous year’s quarter. Capital expenditures totaled $578 million in the same period, down 2.9% year over year. Adjusted free cash flow was $1.1 billion in the first six months of 2024.
In the first six months of 2024, DHR paid out dividends of $377 million, up around 10.7% on a year-over-year basis.
Outlook
For the third quarter of 2024, Danaher expects adjusted core revenues from continuing operations to decline in low-single digits on a year-over-year basis. The same is also anticipated to decrease in low-single digits on a year-over-year basis in 2024.
Zacks Rank & Stocks to Consider
Danaher presently carries a Zacks Rank #4 (Sell).
Some better-ranked companies from the Conglomerates sector are discussed below:
It delivered a trailing four-quarter average earnings surprise of 45.6%. In the past 60 days, the Zacks Consensus Estimate for PDD’s fiscal 2024 earnings has inched up 1.2%. Shares of PDD Holdings have gained 70.3% in the past year.
Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 17%.
The consensus estimate for CSL’s 2024 earnings has increased 0.5% in the past 60 days. Shares of Carlisle have gained 60.2% in the past year.
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank of 1. It delivered a trailing four-quarter average earnings surprise of 33.5%.
In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has increased 4.2%. The stock has risen 70.6% in the past year.
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Danaher (DHR) Q2 Earnings Beat, Biotechnology Sales Dip Y/Y
Danaher Corporation’s (DHR - Free Report) second-quarter 2024 adjusted earnings (excluding 50 cents from non-recurring items) of $1.72 per share surpassed the Zacks Consensus Estimate of $1.57. The bottom line declined 0.6% year over year.
Danaher’s net sales of $5.7 billion outperformed the consensus estimate of $5.6 billion. However, the metric declined 3% year over year due to lower core sales in the Biotechnology segment.
Organic sales decreased 3.5%. Acquisitions had a positive impact of 2% on quarterly sales while adverse foreign-currency translations lowered sales by 1.5%.
Segmental Discussion
On Sep 30, 2023, Danaher completed the separation of its Environmental & Applied Solutions segment. It currently operates under the operating segments discussed below.
Revenues from the Life Sciences segment totaled $1.8 billion, down 1.5% year over year. We expected the Life Sciences segment’s revenues to be $1.8 billion. Core sales dipped 5.5% year over year. Acquisitions/divestitures led to a 6% increase in sales. Operating profit was $233 million, down 31.5% year over year.
Revenues from the Diagnostics segment totaled $2.3 billion, up 1.5% year over year. Our estimate for revenues in the quarter was $2.2 billion. Core sales increased 3% year over year. Foreign currency had a negative impact of 1.5%. Operating profit was $556 million, up 31.1% on a year-over-year basis.
Revenues from the Biotechnology segment totaled $1.7 billion, down 7% year over year. Our estimate for the quarter was $1.6 billion. Core sales dropped 9% for the segment. Operating profit was $462 million, down 3.8% year over year.
Danaher Corporation Price, Consensus and EPS Surprise
Danaher Corporation price-consensus-eps-surprise-chart | Danaher Corporation Quote
Margin Profile
In the second quarter, Danaher’s cost of sales increased 10.8% year over year to $2.3 billion. Gross profit of $3.4 billion increased 3.3% year over year. The gross margin in the quarter was 59.7% compared with 56.1% in the year-ago quarter.
Selling, general and administrative expenses of $1.9 billion recorded an increase of 4.2% on a year-over-year basis. Research and development expenses were $391 million, up 8.3% year over year.
Danaher’s operating profit increased 0.4% year over year to $1.2 billion. Operating margin increased to 20.3% from 19.7% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the second quarter, DHR had cash and equivalents of $2.4 billion compared with $5.9 billion in 2023 end. Long-term debt was $16.3 billion at the end of the quarter compared with $16.7 billion at the end of December 2023.
Danaher generated net cash of $3.2 billion from operating activities in the first six months of 2024 compared with $3.9 billion in the previous year’s quarter. Capital expenditures totaled $578 million in the same period, down 2.9% year over year. Adjusted free cash flow was $1.1 billion in the first six months of 2024.
In the first six months of 2024, DHR paid out dividends of $377 million, up around 10.7% on a year-over-year basis.
Outlook
For the third quarter of 2024, Danaher expects adjusted core revenues from continuing operations to decline in low-single digits on a year-over-year basis.
The same is also anticipated to decrease in low-single digits on a year-over-year basis in 2024.
Zacks Rank & Stocks to Consider
Danaher presently carries a Zacks Rank #4 (Sell).
Some better-ranked companies from the Conglomerates sector are discussed below:
PDD Holdings Inc. (PDD - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It delivered a trailing four-quarter average earnings surprise of 45.6%. In the past 60 days, the Zacks Consensus Estimate for PDD’s fiscal 2024 earnings has inched up 1.2%. Shares of PDD Holdings have gained 70.3% in the past year.
Carlisle Companies Incorporated (CSL - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 17%.
The consensus estimate for CSL’s 2024 earnings has increased 0.5% in the past 60 days. Shares of Carlisle have gained 60.2% in the past year.
Griffon Corporation (GFF - Free Report) presently sports a Zacks Rank of 1. It delivered a trailing four-quarter average earnings surprise of 33.5%.
In the past 60 days, the Zacks Consensus Estimate for GFF’s 2024 earnings has increased 4.2%. The stock has risen 70.6% in the past year.