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Paced by Life Sciences and Diagnostics Business, Danaher Q2 Revenues Increase 5 Percent

NEW YORK (GenomeWeb) – Danaher today reported that its revenues for the second quarter increased 5 percent year over year, narrowly missing the consensus analyst estimate on the top line but topping expectations on the bottom line.

For the three months ended June 27, the Washington-based conglomerate amassed $4.96 billion in total revenues, compared to $4.74 billion in Q2 2013 and just below the average Wall Street expectation of $4.97 billion. Core revenues grew 3 percent year over year, while acquisitions added 1.5 percent to growth, and the impact of currency translation added .5 percent, Danaher said.

Revenues in its Life Sciences & Diagnostics segment rose 7 percent year over year to $1.79 billion from $1.67 billion, the company said in its Form 10-Q filed with the US Securities and Exchange Commission today. Revenues from existing businesses in LS&D were up in the mid-single digits year over year for Q2 2014, primarily driven by demand in the acute care and pathology diagnostic businesses, as well as demand in the clinical business, which was driven by China and other high-growth markets.

The clinical business in North America was up by an undisclosed amount, but was down in Europe, Danaher said.

Revenues from the firm's mass spectrometer business, which is housed in AB Sciex, were up year over year, led by sales in North America and Europe, while its flow cytometry business, housed in Beckman Coulter, and sample preparation product revenues also grew during the quarter, with increases primarily in North America and Western Europe.

Among Danaher's other segments, Test & Measurement was up slightly to $856.5 million from $855 million. Environmental grew 6 percent year over year to $876 million from $826.8 million, while Dental ticked up 3 percent to $528.1 million from $514.7 million. Industrial Technologies revenues rose to $913 million, a 5 percent increase from $866.7 million in the year-ago quarter.

For Q2 2014, Danaher posted a profit of $676.4 million, or $.95 per share, compared to a profit of $616.8 million, or $.87 per share, in Q2 2013. On a non-GAAP basis, EPS was also $.95 for the recently completed quarter, edging out the consensus Wall Street estimate of $.94 per share.

Its R&D expenses increased 8 percent year over year $336.4 million from $312.2 million, while its SG&A costs rose 4 percent to $1.39 billion from $1.34 billion.

Danaher finished the second quarter with $3.3 billion in cash and cash equivalents.

During the second quarter, Beckman Coulter acquired flow cytometry company Xitogen and its US entity Cytojene for an undisclosed amount. In its Form 10-Q, Danaher said that it made 14 acquisitions during the first six months of the year at a total cost of $607 million. The businesses purchased are complementary to its LS&D, Environmental, Dental, and Test and Measurement segments, it said.

On Wednesday, Beckman Coulter announced an agreement to purchase the clinical microbiology business of Siemens Healthcare Diagnostics for an undisclosed amount. ISI Group analyst Ross Muken estimated the deal at about $450 million.

In a statement, Danaher President and CEO Lawrence Culp said that the company has committed more than $1 billion to acquisitions since the start of April, and "we believe that our robust balance sheet, continued focus on organic growth opportunities, and confidence in deploying our more than $8 billion in acquisition capacity will drive solid performance in the second half of 2014 and beyond."

Danaher said that for the third quarter, EPS is anticipated to be in the range of $.86 to $.89 on a GAAP basis. Full-year 2014 EPS guidance was narrowed to a new range of $3.67 to $3.72 from a prior guidance of between $3.60 and $3.75.

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