Danaher Corporation Reports Q3 Beat Above its Preannouncement

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.

Danaher Corporation (NYSE:DHR) reported its Q3 results, with the quarterly beat and raise failing to meaningfully boost expectations, following five consecutive quarters of robust operating results bolstered by solid execution amid a windfall of demand. Quarterly adjusted cash EPS came in at $2.39, beating the consensus of $2.15.

EAS (Product ID + Water Quality) had a margin shortfall from the sector-wide supply chain pressures/inflation/component shortages. Notably, management attributed the relentless DBS execution to keep the fallout from these headwinds to a minimum and suggested it has gained share during this turmoil.

The company anticipates Q4 organic revenue growth of low-to mid-teens and the Q4 base business growth of high-single-digits, and for the revenue tailwind from COVID- related revenues to be a mid-to high-single-digit percentage point contribution to growth.