01—Abstract
Summary
Summary of the 8-K filed April 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Danaher Corporation (NYSE: DHR) reported first quarter 2024 results for the quarter ended March 29, 2024, with revenue of $5.8 billiona, down 2.5% year-over-year from $5.9 billion, and non-GAAP core revenue down 4.0%.
GAAP net earnings were $1.1 billionb, or $1.45 per diluted share, compared with $1.65 per diluted share from continuing operations a year earlier. Non-GAAP adjusted diluted EPS was $1.92, down from $2.05 in the prior-year period. The decline in GAAP earnings was driven by lower gross profit, higher SG&A, and a lower operating margin, partly offset by lower income taxes.
Note that the prior-year GAAP net earnings included $210 millionc from discontinued operations, so the year-over-year comparison of total net earnings is not like-for-like. By segment, Biotechnology core sales fell 17.0%, Life Sciences core sales declined 3.0%, and Diagnostics core sales grew 7.5%. Management highlighted improving order trends in bioprocessing and continued share gains in molecular diagnostics at Cepheid.
Operating cash flow was $1.7 billiond and non-GAAP free cash flow was $1.4 billion, both modestly lower than the prior year. Acquisitions, notably Abcam, contributed roughly 2 percentage points to reported revenue growth, and currency added about 0.5 points. Guidance was mixed relative to the quarter.
For the second quarter of 2024, management expects non-GAAP core revenue to decline by a mid-single-digit percentage year-over-year, and for full year 2024 it continues to expect a low-single-digit core revenue decline. Investors will watch whether bioprocessing recovery and Cepheid strength can offset weakness in Biotechnology and Life Sciences as the year progresses.
02—Key points
Key Highlights
- Revenue of $5.8 billion declined 2.5% year-over-year; non-GAAP core revenue declined 4.0%, reflecting weakness in Biotechnology (-17.0% core) and Life Sciences (-3.0% core), partly offset by Diagnostics (+7.5% core).
- GAAP diluted EPS from continuing operations was $1.45 versus $1.65 a year ago; non-GAAP adjusted diluted EPS was $1.92 versus $2.05, a decline of about 6%.
- Operating profit fell to $1.31 billion from $1.52 billion, with SG&A rising to $1.81 billion and gross profit declining to $3.49 billion from $3.66 billion.
- Income tax expense dropped to $183 million from $283 million, and discrete tax benefits of $36 million aided results.
- Operating cash flow was $1.74 billion and non-GAAP free cash flow was $1.45 billion, versus $1.54 billion in the prior-year period.
- Management cited improving bioprocessing order trends and continued molecular diagnostics share gains at Cepheid as positives.
- Guidance: Q2 2024 non-GAAP core revenue expected to decline mid-single digits; full-year 2024 core revenue expected to decline low-single digits (unchanged).
03—Questions
Frequently Asked Questions
How did Danaher perform in the first quarter of 2024?
Danaher reported revenue of $5.8 billion, down 2.5% year-over-year, with non-GAAP core revenue down 4.0%. GAAP diluted EPS from continuing operations was $1.45, and non-GAAP adjusted diluted EPS was $1.92. Operating cash flow was $1.7 billion and free cash flow was $1.4 billion.
Why did Danaher's earnings decline compared with the prior year?
Operating profit decreased to $1.31 billion from $1.52 billion as gross profit fell and SG&A expenses rose. Non-GAAP EPS declined from $2.05 to $1.92. Lower tax expense partially offset these pressures. Prior-year GAAP net earnings also included $210 million from discontinued operations, which distorts the total net earnings comparison.
Which business segments drove the results?
Diagnostics was the strongest segment, with core sales growth of 7.5%, supported by share gains at Cepheid in molecular diagnostics. Life Sciences core sales declined 3.0%, and Biotechnology core sales fell 17.0%, though management noted improving order trends in bioprocessing.
What is Danaher's outlook for 2024?
For the second quarter of 2024, Danaher expects non-GAAP core revenue to decline by a mid-single-digit percentage year-over-year. For full-year 2024, it continues to expect a low-single-digit core revenue decline. The company provides sales guidance only on a non-GAAP basis.
What contributed to reported revenue versus core revenue?
Reported revenue decline of 2.5% was less severe than the 4.0% core decline because acquisitions added about 2.0 percentage points (notably Abcam, which is a contributor, with Life Sciences acquisitions adding growth) and currency translation added about 0.5 percentage points. Core metrics exclude these effects to show underlying trends.
04—Continue