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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 Corporation Price, Consensus and EPS Surprise
Danaher Corporation price-consensus-eps-surprise-chart | Danaher Corporation Quote
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.