Danaher Corp. (NYSE:DHR) on Wednesday reported third-quarter adjusted earnings of $2.11 per share, beating the analyst consensus estimate of $1.92.
Revenue rose 8.5% year over year to $6.6 billion, beating the analysts’ expectations of $6.559 billion.
Core Revenue Acceleration and Operating Margin Strength
Core revenue rose 3% year over year, in line with management’s guidance of 2%-3%. Excluding respiratory testing revenue, core revenue increased 5.5%.
Julie Sawyer Montgomery, President and CEO, stated, “We delivered better-than-expected third-quarter revenue, earnings and cash flow, and are encouraged by the improving trends we saw across our end markets.”
“The continued acceleration in core revenue growth excluding respiratory revenue, together with DBS-driven execution, drove double-digit adjusted EPS growth and underscored our ability to convert improving demand into strong financial performance,” Montgomery further commented.
The company delivered an adjusted operating profit margin of nearly 30%.
End-Market Dynamics
Montgomery said in an earnings call, “We’re particularly encouraged by the improved momentum we saw across our businesses. Underlying demand across large pharma and biopharma remained robust, biotech activity continued to strengthen, and while academic demand remained below historic levels, demand improved sequentially.”
She added clinical and applied end markets remained healthy and continued to perform well.
Danaher CFO Matt Gugino said healthier funding and investment levels supported Biotechnology and life sciences, and diagnostics continued to move beyond the most significant impacts of China’s healthcare policy changes.
Raised Fiscal 2026 Guidance
For the fourth quarter of 2026, Danaher anticipates that non-GAAP core revenue excluding respiratory revenue will increase in the 4.0% to 5.0% range year-over-year.
The company expects respiratory revenue to be an approximately 150 basis point headwind, resulting in core revenue growth of approximately 3.0%.
Danaher raised its fiscal 2026 adjusted earnings forecast from $8.45-$8.60 per share to $8.57-$8.62 per share versus the consensus of $8.51.
Early Fiscal 2027 Perspective
During the earnings call, CFO Gugino provided an early perspective on the fiscal 2027 outlook.
“We’re encouraged by the improvement in the end markets and the growth we’ve delivered throughout 2026. Excluding respiratory revenue, core revenue growth has averaged 4% to 5% over the past several quarters. So as we look to 2027, we think that 4% to 5% core revenue growth excluding respiratory revenue is the right starting point as we sit today.”
DHR Stock Price Activity: Danaher shares are trading higher by 3.08% at $231.15 at the time of publication on Wednesday, according to Benzinga Pro data.
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