Recently, Danaher Corp. (Parent of Matco Tools and Coats Hennessy) (DHR - Snapshot Report) reported negative second-quarter results. However, they were in line with expectations considering the weak global economy.
Net earnings for the quarter were $296 million, or $0.89 per share -- an 18.5% drop from a year-ago profit of $363 million, or $1.09 per share. However, it surpassed the Zacks Consensus estimate of $0.85 per share.
Despite the challenging economic environment, EPS was above expectations primarily on savings generated from the restructuring actions initiated in 2008 and taken in the first half of 2009 as well as reduction of material costs and operating expenses across the company.
Quarterly sales were $2.67 billion, 18.5% lower than the $3.28 billion reported a year ago. Core revenues fell 15% in the quarter, compared to the second quarter of 2008.
Revenue from the professional instrumentation segment decreased 17% for the quarter with core revenues down 15.5% primarily on lower sales volumes and incremental impact of year-over-year restructuring costs incurred during the quarter.
Environmental platform revenue fell 3.5% in the quarter with core revenue down 1%. ChemTreat revenue was essentially flat year over year as unseasonably cool weather in April and May briefly delayed sales to boiler cooler applications. Test and Measurement revenue declined 30.5% in the quarter with core revenue down 30% reflecting a very challenging market environment.
Tools and Components revenue were down 23% with a core revenue decline of 22.5%.
Danaher’s free cash flow performance is encouraging. It was $438 million at the end of second quarter 2009. Moreover, free cash flow to net income conversion ratio was 148%. Like many in our industry, they appear to be "saving" their way through the recession, not improving their top line.
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