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Danaher's Life Science and Dx Sales Inch up 1 Percent in Q1

The story has been updated to include commments from Danaher's conference call.

NEW YORK (GenomeWeb News) – Danaher today reported that its sales in the first quarter increased 3 percent year over year, while sales in the Life Science and Diagnostics segment inched up 1 percent.

The company recorded companywide sales of $4.44 billion, up from $4.32 billion in the first quarter of 2012, but short of the average Wall Street estimate of $4.50 billion.

Sales for its Life Science and Diagnostics business segment, which houses the Beckman Coulter and AB Sciex businesses, increased to $1.57 billion, compared to $1.55 billion a year ago, according to Danaher's Form 10-Q filed with the US Securities and Exchange Commission.

In a conference call following the release of the company's results, Danaher President and CEO Larry Culp said that the core segment grew 2.5 percent year over year. Diagnostics was up in the mid-single digits, and within that group, core Beckman Coulter sales was up in the low-single digits despite having one less day in the quarter compared to a year ago.

Growth came across all product categories, he said, and added that for the remainder of 2013, Beckman Coulter is anticipated to continue seeing low-single digit growth. In 2014, that is expected to grow in the mid-single digits.

The 2014 growth, Culp said, "is nothing more than the cumulative effects of the both the fixes to quality, to service, in addition to the implementation of" the Danaher Business System, as well as new product development.

Last week, Danaher's Radiometer Medical business completed its $300 million purchase of HemoCue from Quest Diagnostics. HemoCue develops hemoglobin, glucose, and other point-of-care testing systems.

In Life Sciences, core growth was also in the low-single digits, while AB Sciex was up in the mid-single digits, led by the applied and pharmaceutical markets, Culp said.

Asked about the effects of the government sequestration on the overall business, he said that part of the softness in the first quarter could be attributed to the "noise in and around" sequestration.

"It's a noise factor for us right now as opposed to any part of a clear step down as we look out to the rest of the year, at least at this point," Culp said.

Test and Measurement sales improved to $855.4 million from $846.4 million, while sales for Environmental business segment increased to $725.3 million from $694.6 million. Its Dental segment sales were up to $479.8 million from $464.7 million a year ago, and Industrial Technologies sales rose to $816.8 million from $764.6 million.

Danaher's net income for the quarter was $691.9 million, or $.98 per share, compared to $612.9 million, or $.86 per share, a year ago. On an adjusted basis, EPS was $.75, just missing the consensus Wall Street estimate of $.76.

In a statement, Culp said, "Our modest expectations for global growth heading into this year have, so far, played out largely as anticipated. The Danaher Business System continues to help us drive share gains, margins, and cash flow in this low-growth environment. We believe our solid recurring revenue base, the structural cost actions executed in 2012, and an attractive acquisition environment position Danaher well for the balance of 2013 and beyond."

The firm's R&D expenses in the first quarter rose 10 percent to $296.4 million from $270.1 million a year ago, while its SG&A costs were up 5 percent to $1.30 billion from $1.24 billion.

Danaher finished the quarter with $2.15 billion in cash and cash equivalents.

The company said that for the second quarter its EPS on a GAAP basis is expected to fall in the range of $.80 to $.85. It confirmed its adjusted full-year 2013 EPS forecast of between $3.32 and $3.47.

In Thursday morning trade on the New York Stock Exchange shares of Danaher were down 3 percent at $57.94.

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