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UPDATE: Danaher Q1 Revenues Rise 5 Percent; CEO Culp Retiring Next Year

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

NEW YORK (GenomeWeb News) – Danaher said after the close of the market on Wednesday that total revenues for the first quarter increased 5 percent year over year as revenues from its Life Sciences and Diagnostics segment rose nearly 6 percent.

The company also announced that its President and CEO Lawrence Culp will retire on March 1, 2015.

Companywide revenues for the three months ended March 28 reached $4.66 billion, up from $4.44 billion during the first quarter of 2013, but just short of the consensus analyst estimate of $4.67 billion.

Danaher's Life Sciences and Diagnostics segment, its largest, posted $1.66 billion in revenues for Q1, up from $1.57 billion a year ago. In its Form 10-Q filed with the US Securities and Exchange Commission on Wednesday, the company said that sales from existing businesses in its diagnostics business were up in the low-single digits year over year on strong demand in the acute care and pathology diagnostic business and, to a lesser degree, the clinical business, which saw strong demand in high-growth markets, but declines in demand in North America and Europe.

The life sciences business grew in the mid-single digits, Danaher said. On a conference call on Thursday morning, Culp said that core sales in the Beckman Coulter business was up in the low-single digits "led by healthy demand in the high-growth markets. Beckman continues to strengthen its competitive position with first quarter wins in North America exceeding those made in all of 2013."

He added the Q1 2014 was Beckman's best quarter in expanding its installed based since it was acquired in Danaher in 2011.

During the quarter, Beckman Coulter also resolved warning letters it received from the US Food and Drug Administration in previous years concerning its facilities in Chaska, Minn., and Miami, Culp said.

AB Sciex, which houses Danaher's mass specs grew in the high-single digits on strength in the clinical and academic markets, both of which grew in the double digits, he said.

Among its other segments, Test and Measurement revenues improved to $871.0 million from $855.4 million, while Environmental was up to $768.7 million from $725.3 million, and Dental increased to $509.7 million from $479.8 million.

Industrial Technologies revenues grew to $853.7 million from $816.8 million.

For the quarter, Danaher had a profit of $579.7 million, or $.81 per share, down from a net income of $691.9 million, or $.98 per share, a year ago. On a non-GAAP basis, EPS was also $.81, just beating the average analyst estimate of $.80.

The Washington-based conglomerate increased its R&D spending 6 percent year over year to $313.4 million from $296.4 million, and increased its SG&A costs 4 percent to $1.35 billion from $1.30 billion.

Danaher exited the first quarter with $3.35 billion in cash and cash equivalents.

It provided guidance of diluted EPS for the second quarter of between $.90 and $.94, and reaffirmed its full-year 2014 diluted EPS of $3.60 to $3.75.

Separately, the company also announced the retirement of Culp effective March 1, 2015. He will be replaced by Executive Vice President Thomas Joyce, who is in charge of Danaher's Water Quality, Life Sciences, and Diagnostics operations.

Culp, who has been with Danaher since 1990 and became its president and CEO in 2001, will remain at Danaher in an advisory role into the first quarter of 2016.

The company said at the end of 2013 that it had about $8 billion in capital, and planned to use some of it for acquisitions. During the quarter, Danaher closed five purchases across its entire portfolio for about $160 million. On the call, Culp was asked whether his impending retirement would affect the firm's M&A strategy during the next year.

"We do not slow down here at all in terms of what we want to do from an M&A perspective," Culp said. "It's very much business as usual."