Danaher Corporation (NYSE:DHR) reported mixed results when it announced its fourth-quarter results in January. Revenue increased by 5.5% year over year, but earnings decreased by 13%.
Investors learned how Danaher performed in the first quarter on Thursday, with the company providing a quarterly update before the market opened. How did Danaher fare?
By the numbers
Danaher reported revenue in the first quarter of $4.88 billion. This reflected a 3.8% increase from the prior-year period revenue total of $4.7 billion. The consensus among Wall Street analysts projected Q1 revenue of $4.79 billion.
On a GAAP basis, Danaher's net earnings in the first quarter were $333.8 million, or $0.46 per share. The company's bottom line reflected a 41% decrease from the prior-year period GAAP net earnings of $566.6 million, or $0.80 per share.
The company announced adjusted earnings of $1.07 per share in the first quarter. This represented an 8% increase from the $0.99 per share reported in the same quarter of 2018. Analysts were expecting Q1 adjusted earnings of $1.01 per share.
Behind the numbers
While Danaher's total revenue was up only 3.8%, the full story was a little more complicated. Revenue from core operations increased 5.5% year over year. The company's acquisitions boosted revenue another 2.5%. However, there was a negative impact of 4% from foreign exchange.
The company's life sciences segment revenue was up 10% to $1.63 billion. Diagnostics segment revenue was up 1% to $1.54 billion. Environmental and applied solutions segment revenue increased 3% over the prior-year period to $1.1 billion. But the company's dental segment revenue fell 2% year over year to $659.7 million.
Why did Danaher's earnings fall so much? Blame Uncle Sam. The company paid $387.6 million in income taxes in the first quarter compared to $146.5 million in the prior-year period.
Danaher projects that GAAP diluted net earnings per share (EPS) for the second quarter will come in between $0.89 and $0.92. The company expects non-GAAP adjusted EPS between $1.13 and $1.16.
There was also some bad news with Danaher's guidance. The company lowered its full-year 2019 GAAP EPS outlook to a range of $3.34 to $3.42. Danaher's previous guidance called for full-year GAAP EPS between $3.85 and $3.95. The company also now looks for 2019 non-GAAP EPS to be between $4.72 and $4.80 compared to its previous guidance of $4.75 to $4.85. This lower guidance stemmed primarily from a pending acquisition.
President and CEO Thomas P. Joyce, Jr., said:
We are excited about our recently announced agreement to acquire GE Biopharma and continue to expect the deal to close in the fourth quarter of this year. The business will be an excellent complement to our current biologics workflow solutions and will bring a highly innovative, industry-leading product suite to our Life Sciences portfolio. We look forward to welcoming this talented team to Danaher.
The GE Biopharma deal appears to be a good move for Danaher. Investors should have a lot to like with this pending acquisition.