Danaher’s Q3 Beat & Raise Failed to Boost Expectations

Danaher Corporation (NYSE:DHR) saw its stock tumble 7% intra-day today after reporting mixed fourth-quarter results. While revenue exceeded expectations, earnings came in slightly below forecasts, leaving investors cautious about the company’s outlook.

The life sciences and diagnostics giant posted adjusted earnings per share of $2.14, just below the projected $2.15. Revenue, however, rose to $6.54 billion, surpassing the consensus estimate of $6.39 billion and reflecting a 2% year-over-year increase. Non-GAAP core revenue edged up 1% compared to the same period last year.

Despite the revenue beat, investor sentiment remained lukewarm due to concerns over forward guidance. For the first quarter of 2025, Danaher anticipates a low-single-digit decline in non-GAAP core revenue year-over-year. However, for the full year, the company expects approximately 3% non-GAAP core revenue growth.

In 2024, Danaher reported total revenue of $23.9 billion, flat compared to the previous year, with non-GAAP core revenue declining 1.5%. Operating cash flow reached $6.7 billion, while non-GAAP free cash flow totaled $5.3 billion.

Danaher Corporation (NYSE:DHR) is a global science and technology innovator, focusing on life sciences, diagnostics, and environmental solutions. The company competes with other major players in the industry, such as Thermo Fisher Scientific and Agilent Technologies. Danaher is known for its strategic acquisitions and continuous innovation, which have helped it maintain a strong market position.

On January 29, 2025, Danaher reported an earnings per share (EPS) of $2.14, aligning with market expectations. The company generated a revenue of approximately $6.54 billion, surpassing the estimated $6.44 billion. This revenue beat highlights Danaher's ability to perform well despite challenges in the biotech sector, as noted by the decline in demand from biotech and pharmaceutical clients.

Despite the revenue success, Danaher's fourth-quarter earnings fell short of Wall Street's profit expectations. The shortfall is linked to reduced demand for tools and services essential for drug development. This weak demand has impacted the company's financial performance, underscoring the challenges faced in the biotech sector, as highlighted by the company's recent earnings report.

Danaher's financial results for the fourth quarter and full year of 2024 showed stronger-than-expected core revenue across all three segments. This contributed to solid cash flow and an expansion in operating margins. Rainer M. Blair, President and CEO, expressed optimism about the company's future, emphasizing its transformation into a focused life sciences and diagnostics innovator.

The company's financial metrics reflect market confidence in its future growth. With a price-to-earnings (P/E) ratio of 46.04, investors have high expectations for Danaher's earnings growth. The price-to-sales ratio of 8.94 and enterprise value to sales ratio of 9.68 indicate a strong valuation relative to sales. Additionally, a debt-to-equity ratio of 0.34 suggests a conservative capital structure, while a current ratio of 1.37 shows sufficient liquidity to cover short-term liabilities.

Danaher Corporation (NYSE:DHR) reported its Q3 results, with EPS of $2.56 coming in better than the Street estimate of $2.26. Revenue was $7.66 billion, compared to the Street estimate of $7.14 billion.

According to the analysts at RBC Capital, the beat above the company’s September 14 positive preannouncement was paced by broad portfolio strength and upside COVID test revenues. However, bioprocessing orders were down a disappointing 20% year-over-year, against tough comps.

For Q4/22, the company expects non-GAAP base business core revenue to be in the high-single-digit percent range. For fiscal 2022, the company raised its non-GAAP core revenue growth estimates to the high-single-digit percent range.

Danaher Corporation (NYSE:DHR) reported its Q3 results, with EPS of $2.56 coming in better than the Street estimate of $2.26. Revenue was $7.66 billion, compared to the Street estimate of $7.14 billion.

According to the analysts at RBC Capital, the beat above the company’s September 14 positive preannouncement was paced by broad portfolio strength and upside COVID test revenues. However, bioprocessing orders were down a disappointing 20% year-over-year, against tough comps.

For Q4/22, the company expects non-GAAP base business core revenue to be in the high-single-digit percent range. For fiscal 2022, the company raised its non-GAAP core revenue growth estimates to the high-single-digit percent range.

Danaher Corporation (NYSE:DHR) hosted an in-person analyst meeting last week, providing investors a deeper dive into its portfolio evolution, DBS success stories, and the company’s longer-term targets.

The company announced its plans to separate its leading Water Quality test/treatment business and Product ID non-contact printing business into a standalone entity by Q4/23.

Analysts at RBC Capital expect the company can over-deliver and orchestrate the separation earlier than the initial target. According to the analysts, the upside in Cepheid COVID testing revenues in Q3/22 was nice to see, and the new long-term targets look achievable to them, especially given underlying market growth in biologics and Danaher’s share gains.