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Danaher Q3 Revenues Grow 7 Percent

NEW YORK (GenomeWeb) – Danaher today said that sales for the third quarter rose almost 7 percent year over year. 

For the three months ended Oct. 2, the company posted $5.02 billion in sales, up from $4.71 billion a year ago but short of the consensus Wall Street estimate of $5.06 billion. Danaher said that on a non-GAAP basis, core revenues grew 3 percent year over year, while acquisitions grew sales by almost 11 percent. Currency effects reduced sales by 7 percent. 

By segment, Life Science and Diagnostics sales grew almost 15 percent year over year to $2 billion from $1.74 billion a year ago, Danaher said in a form 10-Q filed with the US Securities and Exchange Commission. Core revenues for the segment were up about 4 percent, Danaher President and CEO Thomas Joyce said on a conference call following the release of the firm's financial results. 

Acquisitions, including the $13.8 billion buy of Pall completed in August, contributed 18 percentage points of growth to the segment during the quarter.

Diagnostics platform core revenues grew in the low-single digits year over year, Joyce said, adding that Beckman Coulter core revenues were up in the low-single digits, driven by urinalysis and immunoassay product sales. 

Meanwhile, life science platform core revenues were up in the mid-single digits year over year with high-single digit growth in the US and double digit growth in Europe, offset partially by weakness in the high-growth markets. Within life sciences, Sciex grew in the mid-single digits on continued strength in the pharma and clinical end markets, Joyce said. 

Among Danaher's other segments, Test and Measurement sales slid 2 percent to $643.5 million from $657.8 million, while core revenues in that unit grew more than 2 percent, Joyce said. He added that Environmental segment sales were up nearly 1 percent to $922.4 million from $914.1 million, while core revenues were up 6 percent. 

The Dental segment rose 23 percent to $652.2 million from $528.4 in Q3 2014, while core revenues decreased slightly. Lastly, Industrial Technologies declined 7 percent to $807.7 million from $865.6 million. Core revenues were flat year over year in the segment. 

Geographically, the US grew at a low-single digit rate and Western Europe was up in the mid-single digits as a result of share gains "in a number of our businesses," Joyce said. The high-growth markets saw mixed demand as strength in India was partially offset by weakness in Brazil, Russia, and the Middle East. China, meanwhile, grew in the mid-single digits. 

Danaher recorded a total profit of $1.40 billion, or $2.01 per share, compared to $680.6 million, or $.95 per share, in the year-ago period. 

During Q3, the firm split off the majority of its Test and Measurement segment's communications business. Profits from Danaher's continuing operations were $590 million, or $.85 per share, compared to $681.3 million, or $.95 per share, a year ago. 

On an adjusted basis, EPS from continuing operations for the third quarter was $1.05, beating the consensus Wall Street estimate of $1.03. 

Danaher increased its R&D spending 7 percent to $307.9 million from $288.1 million. Its SG&A costs were up 18 percent $1.53 billion from $1.30 billion. 

Danaher estimated that for the fourth quarter, adjusted EPS from continuing operations would be in the range of $1.25 to $1.29. Joyce said on the call that core revenues are expected to grow at 2 percent. 

In May, the firm said that it would be splitting into two publicly traded firms. Danaher's existing Life Sciences and Diagnostics and Dental segments, water quality and product identification platforms, and Pall will comprise one firm, which will retain the Danaher name. The other firm will comprise Danaher's Test and Measurement instruments platform, as well as its specialty industrial businesses. 

The split remains on track to be completed at the end of 2016, the firm said. 

"We are pleased with our team's solid execution, which drove solid core growth, earnings performance and free cash flow," Joyce said. "In a weakening global macroenvironment, we saw the positive impact of the Danaher Business System across our portfolio." 

In morning trading on the New York Stock Exchange, Danaher's shares increased 2 percent to $91.16.