Danaher Q1 Earnings Beat Estimates, Life Sciences Sales Down Y/Y

Danaher Corporation’s DHR first-quarter 2025 adjusted earnings of $1.88 per share beat the Zacks Consensus Estimate of $1.62. However, the bottom line decreased 2.1% year over year.

Danaher reported net sales of $5.74 billion, which beat the consensus estimate of $5.56 billion. However, the metric decreased 1% year over year, owing to the lackluster performance of the Diagnostics and Life Sciences segments.

DHR’s core sales were flat in the quarter. Acquisitions had a positive impact of 0.5% on quarterly sales while foreign-currency translations had an adverse impact of 1.5%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

DHR’s Segmental Discussion

Revenues from the Life Sciences segment totaled $1.68 billion, down 3.5% year over year. We expected the segment’s revenues to be $1.62 billion. Core sales decreased 4% year over year. Acquisitions had a positive impact of 2% on segmental sales while foreign-currency translations had a negative impact of 1.5%. Operating profit was $201 million, down 14.5% year over year. 

Revenues from the Diagnostics segment totaled $2.44 billion, down 3.1% year over year. Our estimate for revenues was $2.35 billion. Core sales decreased 1.5% year over year, while foreign currency had an adverse impact of 1% on sales. Acquisitions/divestitures impacted sales by 0.5%. Operating profit was $718 million, down 13.5% on a year-over-year basis.

Revenues from the Biotechnology segment totaled $1.61 billion, up 6% year over year. Our estimate was $1.59 billion. Core sales increased 7% year over year while foreign-currency translations had an adverse impact of 1%. Operating profit was $441 million, up 35.7% year over year.

Danaher’s Margin Profile

In the first quarter, Danaher’s cost of sales decreased 3.4% year over year to $2.2 billion. Gross profit of $3.51 billion increased 0.7% year over year. The gross margin was 61.2% compared with 60.2% in the year-ago quarter.

Selling, general and administrative expenses of $1.86 billion recorded an increase of 2.8% on a year-over-year basis. Research and development expenses were $379 million, up 3% year over year.

Danaher’s operating profit decreased 2.9% year over year to $1.27 billion. Operating margin contracted to 22.2% from 22.6% in the year-ago quarter.

DHR’s Balance Sheet and Cash Flow

Exiting the first quarter, DHR had cash and equivalents of $2 billion compared with $2.1 billion at 2024-end. Long-term debt was $16 billion at the end of the quarter compared with $15.5 billion at the end of December 2024.

Danaher generated net cash of $1.3 billion from operating activities in the first three months of 2025 compared with $1.7 billion in the previous year’s comparable period. Capital expenditures totaled $245 million in the same period, down 15.8% year over year. Adjusted free cash flow decreased 27% year over year to $1.06 billion in the first three months of 2025.

In the same period, DHR paid out dividends of $194 million, up 9.6% on a year-over-year basis.

Danaher’s Outlook

For the second 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 approximately 3% on a year-over-year basis in 2025. The company expects adjusted earnings to be $7.60-$7.75 per share.

DHR’s Zacks Rank

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

AZZ Inc. AZZ came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the Zacks Consensus Estimate by 3.77%. This compares with year-ago revenues of $366.5 million. 

Valmont Industries VMI reported revenues of $969.31 million in the first quarter of 2025, declining 0.9% on a year-over-year basis. EPS of $4.32 for the same period compares with $4.32 a year ago.

The reported revenues compare with the Zacks Consensus Estimate of $975.6 million. The company delivered an EPS surprise of 1.89%, with the consensus estimate being $4.24.

Pentair plc PNR came out with quarterly earnings of $1.11 per share in the first quarter of 2025, beating the Zacks Consensus Estimate of $1.01. This compares with earnings of $0.94 per share a year ago.

Pentair posted revenues of $1.01 billion for the quarter, surpassing the Zacks Consensus Estimate by 2.68%. This compares with year-ago revenues of $1.02 billion.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research