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Danaher Q3 Revenues Rise 10 Percent

NEW YORK (GenomeWeb) – Danaher today reported a 10 percent year-over-year increase in its third quarter revenues, boosted by a 20 percent increase in sales in its diagnostics segment.

For the three months ending Sept. 29, total sales rose to $4.53 billion, compared to $4.13 in the year-ago period, and beating the consensus Wall Street estimate of $4.47 billion.

Core revenues were up 3 percent, while the impact of currency translation increased revenues by 1 percent, and acquisitions improved revenues by 5.5 percent, Danaher President and CEO Thomas Joyce said on a conference call following the release of the financial results.

So far, the company has closed five acquisitions in 2017, totaling more than $100 million, he added.

The firm's diagnostic revenues increased to $1.45 billion from $1.21 billion in Q3 2016, while core revenues grew 4 percent year over year, Joyce said.

Beckman Coulter's diagnostics business saw revenues grow in the low single digits year over year, as the immunoassay product line performed "very well with continued installed base growth," and demand for the vitamin D assay remained steady, he noted.

During the quarter, Danaher discontinued sales of the Beckman Coulter DxN Veris molecular diagnostics product line, which Beckman Coulter had been developing since at least 2007, before the company was acquired by Danaher. 

Meantime, Cepheid's core revenues grew in the double digits year over year. Joyce said that the improvement was seen in both the developed markets and the high-growth markets, as well as across most major product lines. Infectious disease and sexual health revenues each rose in the double digits, and while the hospital-acquired infections market was softer, "we feel good about how we're positioned there," he added.

"The investment that continues to go on at Cepheid associated with innovation and new products, I think, bodes well for the future," Joyce said, noting that Danaher also is investing to expand Cepheid's geographic footprint. The firm is building a team in China, and though that effort is still in its early days, it "is growing nicely," he added.

In Danaher's life science segment, revenues increased to $1.39 billion in the recently completed quarter from $1.33 billion a year ago, a 5 percent increase year over year. Core revenues were up 3 percent.

Beckman Coulter's core life science business grew in the high-single digits "on broad-based strength across all major product lines and regions," Joyce said. The Sciex unit, which houses Danaher's mass spectrometry business, was up in the mid-single digits, led by food and forensic testing, and it saw sustained momentum in pharmaceutical testing as the result of increased regulatory requirements in China.

Among Danaher's other segments, dental revenues rose to $694.0 million from $675.6 million, and environmental and applied solutions rose to $992.9 million from $918.4 million.

Net earnings for Q3 rose to $572.1 million, or $.81 per share, from $391.6 million, or $.56 per share, a year ago. Adjusted EPS was $1.00, beating the analysts' average estimate of $.95 per share. 

The company increased its Q3 R&D spending 16 percent year over year to $279.2 million from $241.1 million, and ramped up its SG&A spending 10 percent to $1.49 billion from $1.35 billion.

Danaher finished the quarter with $648.6 million in cash and cash equivalents.

For the fourth quarter, Danaher anticipates EPS of $.94 to $.98, and adjusted EPS of $1.12 to $1.16. Analysts are expecting EPS of $1.16 for Q4. For full-year 2017, Danaher expects EPS of $3.23 to $3.27, and raised its adjusted EPS estimate to a new range of $3.96 to $4.00 from a prior range of $3.90 to $3.97. Analysts are expecting EPS of $3.96 for the full year.

In early morning trading on the New York Stock Exchange, Danaher shares rose 6 percent to $91.30.