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Danaher Q1 Revenues Rise 7 Percent

NEW YORK (GenomeWeb) – Danaher reported before the opening of the market on Thursday that its first quarter sales rose 7 percent year over year.

For the three months ended March 31, the firm reported revenues of $4.21 billion, up from $3.92 billion in Q1 2016, and beating the average Wall Street estimate for sales of $4.17 billion.

"We are off to a good start in 2017," Danaher President and CEO Thomas Joyce said in a statement. "During the first quarter, our two most recent large acquisitions, Pall and Cepheid, performed very well. We drove share gains in a number of our operating companies and achieved high-single-digit adjusted earnings per share growth. We also continued to reinvest in our businesses to enhance our long-term growth trajectory, and we feel well-positioned to benefit from a number of compelling market drivers across the portfolio."

On a conference call with analysts following the release of the earnings, Joyce said that revenues from the company's life sciences business grew 4 percent in the quarter. Revenues from developed markets were slightly softer, but Danaher saw strong momentum in China. Core revenues from the company's Sciex and Pall units were up by single digits.

Revenues from the diagnostics business grew 17 percent in Q1. In particular, Joyce said, Cepheid was "off to a great start" with double-digit core revenue growth in the quarter. He also touted the US Food and Drug Administration approval Cepheid received for its Xpert Xpress Flu and Xpert Xpress Flu/RSV tests in February.

Overall, he added, Danaher is "extremely pleased with how [Cepheid] has performed." The unit's infectious disease and sexual health portfolios are performing particularly well, Joyce noted. Its hospital acquired infections business is growing more modestly than the rest of its portfolio, but the company is encouraged by the potential for long-term growth in that area. Cepheid is also planning to advance its menu and is looking to develop new instruments, so Joyce said he expects the strong performance to continue.

He also noted that acquisitions increased Q1 revenues by 6 percent, and announced that Danaher made two acquisitions for nearly $100 million during the quarter, though he did not specify which companies were acquired. Those deals are expected to close in Q2, and the company plans to continue making small and midsize acquisitions during the year.

The firm's Q1 net earnings fell to $506.1 million, or $.72 per share, from $758.4 million, or $1.09 per share, a year earlier. On an adjusted basis, Danaher reported earnings per share from continuing operations of $.85, beating the average analyst estimate for EPS of $.84.

Danaher's Q1 R&D costs rose 18 percent to $267.4 million from $226.1 million a year ago. Its SG&A expenses for the quarter rose 8 percent to $1.44 billion from $1.33 billion in the year-ago quarter.

The firm ended the quarter with $803.9 million in cash and cash equivalents.

For Q2, the company anticipates adjusted earnings per share of $.95 to $.98, and expects adjusted earnings per share of $3.85 to $3.95 for the full year. Analysts are currently expecting Q2 EPS of $.99, and full-year 2017 EPS of $3.95.

Danaher's shares fell more than 3 percent to $83.57 in Thursday morning trading on the New York Stock Exchange.