Danaher Beats Q1 Expectations, Signals Caution Ahead In 'Unusual Times'

Danaher Corp DHR on Tuesday reported first-quarter 2025 sales of $5.74 billion, down 1% year-over-year, beating the consensus of $5.59 billion. 

Non-GAAP core revenue was flat compared to the expectations of a decline by a low-single-digit percentage year-over-year in the first quarter.

Danaher reported second-quarter adjusted EPS of $1.88, down from $1.92 a year ago, beating the consensus of $1.64.

Operating cash flow was $1.3 billion, and non-GAAP free cash flow was $1.1 billion.

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Rainer Blair, president and chief executive officer, stated, “Revenue, earnings, and cash flow exceeded our expectations in the first quarter–highlighted by continued momentum in bioprocessing and better-than-expected respiratory demand in our molecular diagnostics business.”

“While the macro backdrop has become more dynamic since the start of the year, it’s in times like these that Danaher’s positioning and capabilities truly stand out. We believe that the combination of our team’s DBS-driven execution, resilient portfolio and strong balance sheet will continue to differentiate Danaher in 2025 and beyond,” Blair added.

Biotechnology sales increased to $1.61 billion compared to $1.52 billion a year ago.

Sales in the Life Sciences segment fell from $1.75 billion to $1.68 billion, and diagnostic sales decreased marginally from $2.53 billion to $2.45 billion.

The adjusted operating margin reached 29.6%, down from 30.1% a year ago, surpassing the management estimate of around 26.5%.

Guidance: Danaher reaffirms that in fiscal year 2025, non-GAAP core revenue will grow by approximately 3% year over year.

For FY2025, Danaher initiated adjusted EPS guidance of $7.60 to $7.75 vs. the consensus of$7.68. The company said, “We wanted to make sure everyone had an anchor point and believe having an adjusted EPS guide provides more clarity.”

“We are in unusual times and think it’s best to be as transparent as possible,” the company added.

The company forecasts that 2025 bioprocessing core revenue will increase in the high single digits, compared to the prior expectation of +6% to +7%.

Cepheid 2025 respiratory revenues will be around $1.7 billion.

For the second quarter of 2025, Danaher anticipates core revenue growth in low-single digits year over year.

The company expects an adjusted operating profit margin of ~25.5% due to a sequential decline compared to Q1. This is primarily due to lower respiratory volume at Cepheid, one of the higher-margin businesses, and the operating leverage is meaningful.

Bioprocessing core revenue growth is expected to be 7% for Q2 2025 and fiscal year 2025.

Life Sciences core revenue is expected to decline in the low-single to mid-single digits in Q2 2025 and remain flat for the fiscal year 2025.

Diagnostics sales are expected to increase in the low single digits in Q2 2025 and remain flat to low single digits in fiscal year 2025.

Price Action: At last check on Tuesday, DHR stock was trading 4.08% higher at $192.50 during the premarket session.

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