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Danaher Q4 Revenues Up 6 Percent

NEW YORK (GenomeWeb) – Danaher today said its fourth quarter revenues from continuing operations grew 6 percent year over, helped by 11 percent growth in its diagnostic segment and a 6 percent improvement in its life sciences segment.

Total revenues for the three months ended Dec. 31, 2016 rose to $4.58 billion from $4.32 billion in the year-ago period, outpacing the consensus Wall Street estimate of $4.53 billion. Acquisitions pushed revenues up by 4 percent year over year, while core revenues grew more than 3 percent. The impact of currency translation negatively impacted revenues by more than 1 percent, the Washington-based conglomerate said.

By segment, life sciences revenues were up to $1.45 billion in the recently completed quarter from $1.37 billion in Q4 2015, and diagnostics revenues rose to $1.43 billion from $1.29 billion a year ago.

Danaher's dental segment revenues increased a fraction of 1 percent to $739.3 million from $734.6 million, and the environment and applied solutions segment bounced 3 percent to $959.1 million from $926.8 million.

In life sciences, core revenues grew 4 percent year over year, Danaher President and CEO Thomas Joyce said on a conference call after the release of the firm's financial results. Beckman Coulter's life science business grew in the low-single digits during the quarter, led by its flow cytometry and particle counting businesses, he added.

The Sciex business, which houses Danaher's mass spectrometry franchise, rose at a mid-single digit pace year over year, led by growth in China and Western Europe, while Sciex's service offering rose in the double digits, Joyce said.

In diagnostics, core revenues grew 3 percent year over year as Beckman Coulter's diagnostics business saw low-single digit growth in Q4 2016, led by its immunoassay solutions, Joyce said. Meanwhile, Leica Biosystems' core revenues declined in the low-single digits on softness in North America and the Middle East.

Advanced staining consumables rose in the double digits, Joyce said, but was offset by core weakness in histology and pathology imaging products.

In diagnostics, Danaher added the Cepheid business in November, one of eight acquisitions companywide that Danaher completed in 2016 for a total of $5 billion. Cepheid's revenues increased in the double digits in Q4 2016, Joyce said.

"We continue to see tremendous opportunity to deliver better top- and bottom-line performance over time through the application of" the Danaher Business System, Joyce added. On the integration of Cepheid into Danaher, he said that "the team is off to a very good start. … A very fast start."

Its R&D sending in Q4 2016 came in at $268 million, up 14 percent year over year from $236.1 million a year ago, while SG&A costs grew 9 percent to $1.50 billion from $1.37 billion.

Danaher recorded net earnings of $747 million, or $1.07 per share, from continuing operations in the quarter, up from $521 million, or $.75 per share, in Q4 2015. Adjusted EPS from continuing operations was $1.05, beating the average Wall Street estimate of $1.03.

Danaher finished 2016 with $963.7 million in cash and cash equivalents.

For full-year 2016, the company recorded $16.88 billion in revenues, up 17 percent from $14.43 billion in full-year 2015, and above analysts' average estimate of $16.83 billion.

Core revenues improved 3 percent, while acquisitions added 15 percentage points of improvement. The impact of currency translation decreased revenues by 1 percent.

Life science revenues increased 62 percent year over year to $5.37 billion from $3.31 billion, helped by the full-year revenue contribution from Pall, which Danaher acquired in August 2015. Diagnostics revenues rose 4 percent to $5.04 billion from $4.83 billion.

The dental segment saw revenues improve 2 percent to $2.79 billion from $2.74 billion, and environmental and applied solutions revenues rose 4 percent to $3.69 billion from $3.55 billion.

Its R&D costs for the year came in at $975.1 million compared to $861.4 million, a 13 percent increase. SG&A spending rose 18 percent to $5.61 billion from $4.75 billion.

Net earnings from continuing operations for full-year 2016 was $2.15 billion, or $3.08 per share, compared to $1.75 billion, or $2.47 per share, in 2015.

Adjusted EPS from continuing operations of $3.61 beat analysts' average estimate of $3.57.

For Q1 2017, Danaher forecast EPS to be in the range of $.64 to $.67. Adjusted EPS is anticipated to be between $.82 and $.85.

Full-year 2017 EPS is expected to be in the range of $3.13 to $3.23 with adjusted EPS anticipated to be between $3.85 and $3.95.