Good News from Danaher

Mar. 6.08 | About: Danaher Corporation (DHR)

Good news from Danaher (NYSE:DHR). The company reaffirmed its first-quarter earnings estimate of 84 to 89 cents a share. That doesn’t include a five-cent charge related to its acquisition of Tektronix. Wall Street’s consensus is for 88 cents a share.

The stock has pulled back sharply this year, but the shares had a pretty good run over the past few years, so some consolidation isn’t a big surprise. Management has been pretty good about controlling Wall Street’s expectations. For the past few years, Danaher usually meets or just barely beats expectations.

Danaher has been a pretty shrewd dealmaker. Larry Culp, the CEO, said that the company may take advantage of the lower prices that the stock market is offering.

CEO Larry Culp told the Citigroup Global Industrial Manufacturing conference the company's portfolio transformation toward higher-margin global businesses such as medical instruments is continuing, and deals are set to play a prominent role.

"We're optimistic about M&A in this environment," Culp said. "You go back to the last time we saw a slowdown, we were very active in '02."

"But I wouldn't say our pipeline has changed materially," he added. "Valuations in the public markets have come down ... (but) it may be a little early to really see the things in the pipeline come into the zone where they're actionable."