Danaher Earnings: Margins REBOUND, Net Income Drops

Rising costs hurt S&P 500 (NYSE:SPY) component Danaher Corporation (NYSE:DHR) in the second quarter as profit dropped from a year earlier. Danaher designs and manufactures professional, medical, industrial, and consumer products.

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Danaher Corporation Earnings Cheat Sheet

Results: Net income for the diversified operations fell to $600.1 million (84 cents per share) vs. $648.8 million (94 cents per share) a year earlier. This is a decline of 7.5% from the year-earlier quarter.

Revenue: Rose 25.2% to $4.55 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Danaher Corporation beat the mean analyst estimate of 80 cents per share. Analysts were expecting revenue of $4.58 billion.

Quoting Management: H. Lawrence Culp, Jr., President and Chief Executive Officer, stated, “We were pleased by the sequential improvement in core growth and our very strong margin and cash flow performance in the quarter. While the team continues to execute well, the worsening macroeconomic headlines suggest it’s prudent to accelerate cost actions while maintaining our growth investments. We believe our focus on capturing market share while accelerating cost reductions, coupled with our optimism on the acquisition front, positions us well for the balance of 2012 and beyond.

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the first quarter, by 3 cents in the fourth quarter of the last fiscal year, and by 3 cents in the third quarter of the last fiscal year.

Last quarter’s profit decrease interrupts a two-quarter streak of profit increases. Net income rose 42.8% in the first quarter and 20.4% in the fourth quarter of the last fiscal year.

Looking Forward: The average estimate for the third quarter is steady at 85 cents a share. For the fiscal year, the average estimate has moved down from $3.32 a share to $3.30 over the last thirty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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