It has been about a month since the last earnings report for Danaher (DHR). Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Danaher due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Danaher Q4 Earnings Beat Estimates, Life Sciences Sales Up Y/Y
Danaher’s fourth-quarter 2025 adjusted earnings of $2.23 per share beat the Zacks Consensus Estimate of $2.22. The bottom line increased 4% year over year.
Danaher reported net sales of $6.84 billion, which beat the consensus estimate of $6.79 billion. The metric increased 4.5% year over year, driven by the impressive performance of all the segments.
It’s core sales increased 2.5% year over year in the quarter. Foreign-currency translations had a positive impact of 2.5%, while acquisitions/divestitures had an adverse impact of 0.5%.
In 2025, it reported net revenues of $24.6 billion, which increased 3% year over year. The company’s adjusted earnings were $7.80 per share, up 4.5% year over year.
Segmental Discussion
Revenues from the Life Sciences segment totaled $2.09 billion, up 2.5% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.06 billion. Core sales increased 0.5% year over year. Foreign-currency translations had a positive impact of 2%. Operating profit was $336 million compared with $376 million reported in the year-ago quarter.
Revenues from the Diagnostics segment totaled $2.72 billion, up 3% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.71 billion. Core sales increased 2% year over year, while foreign currency had a positive impact of 2% on sales. However, acquisitions/divestitures impacted sales by 1%. Operating profit was $713 million, up 14.3% on a year-over-year basis.
Revenues from the Biotechnology segment totaled $2.03 billion, up 9% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.02 billion. Core sales increased 6% year over year, while foreign-currency translations had a positive impact of 3%. Operating profit was $540 million, up 6.3% year over year.
Danaher’s Margin Profile
In the fourth quarter, Danaher’s cost of sales increased 8.5% year over year to $2.87 billion. Gross profit of $3.97 billion increased 2% year over year. The gross margin was 59.1% compared with 59.5% in the year-ago quarter.
Selling, general and administrative expenses of $2.03 billion increased 0.1% on a year-over-year basis. Research and development expenses were $438 million, down 0.9% year over year.
Danaher’s operating profit increased 5.4% year over year to $1.50 billion. Operating margin declined to 19.1% from 20.4% in the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the fourth quarter, it had cash and equivalents of $4.62 billion compared with $2.08 billion at 2024-end. Long-term debt was $18.4 billion at the end of the quarter compared with $15.5 billion at the end of December 2024.
Danaher generated net cash of $6.42 billion from operating activities in 2025 compared with $6.69 billion in the previous year’s comparable period. Capital expenditures totaled $1.16 billion in the same period, down 17% year over year. Adjusted free cash flow decreased 0.3% year over year to $5.3 billion in 2025.
In the same period, it paid out dividends of $878 million, up 14.3% on a year-over-year basis.
Danaher’s Outlook
For the first quarter of 2026, 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 3-6% on a year-over-year basis in 2026. The company expects adjusted earnings to be $8.35-$8.50 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Danaher has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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 D. 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. Notably, Danaher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Danaher is part of the Zacks Medical Services industry. Over the past month, HCA Healthcare (HCA), a stock from the same industry, has gained 9%. The company reported its results for the quarter ended December 2025 more than a month ago.
HCA reported revenues of $19.51 billion in the last reported quarter, representing a year-over-year change of +6.7%. EPS of $8.01 for the same period compares with $6.22 a year ago.
For the current quarter, HCA is expected to post earnings of $7.18 per share, indicating a change of +11.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for HCA. Also, the stock has a VGM Score of A.
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Danaher Corporation (DHR): Free Stock Analysis Report HCA Healthcare, Inc. (HCA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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