It has been about a month since the last earnings report for Danaher (DHR). Shares have added about 2% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Danaher due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Danaher Corporation before we dive into how investors and analysts have reacted as of late.
Danaher Q3 Earnings Beat Estimates, Life Sciences Sales Up Y/Y
Danaher’s third-quarter 2025 adjusted earnings of $1.89 per share beat the Zacks Consensus Estimate of $1.71. The bottom line increased 10.5% year over year.
Danaher reported net sales of $6.05 billion, which beat the consensus estimate of $6.00 billion. The metric increased 4.5% year over year, driven by the impressive performance of all the segments.
Its core sales increased 3% year over year in the quarter. Foreign-currency translations had a positive impact of 1.5%.
Segmental Discussion
Revenues from the Life Sciences segment totaled $1.79 billion, up 0.5% year over year. However, core sales decreased 1% year over year. Foreign-currency translations had a positive impact of 1.5%. Operating profit was $222 million compared with $35 million reported in the year-ago quarter.
Revenues from the Diagnostics segment totaled $2.46 billion, up 4% year over year. Core sales increased 3.5% year over year, while foreign currency had a positive impact of 1% on sales. However, acquisitions/divestitures impacted sales by 0.5%. Operating profit was $665 million, up 8.1% on a year-over-year basis.
Revenues from the Biotechnology segment totaled $1.80 billion, up 9% year over year. Core sales increased 6.5% year over year, while foreign-currency translations had a positive impact of 2.5%. Operating profit was $352 million, down 9.7% year over year.
Danaher’s Margin Profile
In the third quarter, Danaher’s cost of sales increased 5.5% year over year to $2.53 billion. Gross profit of $3.52 billion increased 3.6% year over year. The gross margin was 58.2% compared with 58.7% in the year-ago quarter.
Selling, general and administrative expenses of $2.00 billion recorded a decrease of 3.3% on a year-over-year basis. Research and development expenses were $378 million, down 1.3% year over year.
Danaher’s operating profit increased 20.5% year over year to $1.15 billion. Operating margin expanded to 19.1% from 16.5% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the third quarter, it had cash and equivalents of $1.53 billion compared with $2.08 billion at 2024-end. Long-term debt was $16.8 billion at the end of the quarter compared with $15.5 billion at the end of December 2024.
Danaher generated net cash of $4.30 billion from operating activities in the first nine months of 2025 compared with $4.67 billion in the previous year’s comparable period. Capital expenditures totaled $785 million in the same period, down 10.4% year over year. Adjusted free cash flow decreased 7.5% year over year to $3.52 billion in the first nine months of 2025.
In the same period, it paid out dividends of $652 million, up 13.8% on a year-over-year basis.
Danaher’s Outlook
For the fourth quarter, Danaher expects adjusted core sales from continuing operations to increase in the low single digits on a year-over-year basis.
The metric is anticipated to increase in low-single digits on a year-over-year basis in 2025. The company expects adjusted earnings to be $7.70-$7.80 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -9.79% due to these changes.
VGM Scores
Currently, Danaher has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Danaher has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Danaher Corporation (DHR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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