Danaher Raises 2026 EPS Outlook as Q3 Revenue Grows 8.5%

Danaher Corporation (DHR ) reported third-quarter 2026 results on October 21, 2026, with revenue rising 8.5% year-over-year to US$6.6 billion and net earnings of $1.2 billion, or $1.71 per diluted common share, up 34.5%. Non-GAAP adjusted diluted net earnings per common share grew 11.5% to $2.11, and the company raised its full-year 2026 adjusted diluted earnings per share guidance to a range of $8.57 to $8.62 from the previous $8.45 to $8.60, according to its third-quarter earnings release.

All results in the release reflect only continuing operations, and period-to-period comparisons are year-over-year unless otherwise noted. The quarter ended September 25, 2026.

The company’s consolidated condensed statement of earnings shows sales of $6,554 million versus $6,053 million in the comparable 2025 period. Gross profit was $3,837 million versus $3,523 million. Selling, general and administrative expenses were $2,159 million versus $1,991 million, and research and development expenses were $433 million versus $378 million. Operating profit was $1,245 million versus $1,154 million. Interest expense rose to $135 million from $67 million, while interest income rose to $31 million from $3 million; the release’s forward-looking risk factors reference debt incurred to finance the acquisition of Masimo Corporation. The quarter included an income tax benefit of $75 million versus an income tax expense of $168 million a year earlier, with net discrete tax benefits of $263 million related primarily to the release of reserves for uncertain tax positions resulting from audit settlements. Diluted average shares outstanding were 706.8 million versus 713.7 million in the prior-year quarter.

Operating cash flow was $1,886 million versus $1,662 million a year earlier. Capital expenditures were $255 million versus $292 million, and non-GAAP free cash flow was $1,632 million versus $1,370 million, an increase the company’s reconciliation table puts at approximately 19.0%. The free-cash-flow-to-net-earnings conversion ratio was 1.35 versus 1.51 in the comparable 2025 period. For the nine-month period ended September 25, 2026, sales were $18,770 million versus $17,730 million, net earnings were $3,134 million versus $2,417 million, and diluted earnings per share from continuing operations were $4.38 versus $3.37. Nine-month investing activities used $10,696 million, while financing activities provided $7,057 million.

Segment Sales Composition

Total GAAP sales growth of 8.5% comprised Biotechnology up 0.5%, Life Sciences up 4.0% and Diagnostics up 17.0%. In the company’s bridge from GAAP sales growth to non-GAAP core sales growth, acquisitions and divestitures accounted for a 6.5 percentage point reduction at the total company level and a 16.5 point reduction in Diagnostics, currency exchange rates had no total company impact, and tariff refunds to customers added 1.0 point at the total company level and 4.0 points in Biotechnology.

Non-GAAP core sales growth was 3.0% at the total company level, with Biotechnology up 5.0%, Life Sciences up 4.5% and Diagnostics up 0.5%. Excluding respiratory testing, total core sales growth was 5.5% and Diagnostics core sales growth was 7.0%. Respiratory testing sales were approximately $350 million in the quarter versus approximately $500 million in the comparable 2025 period; the company rounds actual respiratory testing sales to the nearest $50 million. Beginning with its Quarterly Report on Form 10-Q for the third quarter of 2026, Danaher is excluding tariff refunds to customers from core sales growth and core sales excluding respiratory testing.

The reconciliation from GAAP diluted net earnings per share from continuing operations of $1.71 to adjusted diluted net earnings per share of $2.11 includes $0.73 for amortization of acquisition-related intangible assets ($513 million pretax), $0.12 for acquisition-related items, $0.07 for impairment charges related to a facility in the Biotechnology segment ($52 million pretax), and $0.02 for compensation expense related to special long-term growth equity awards granted in the third quarter of 2026 ($14 million pretax), partially offset by $0.37 of discrete tax adjustments. The acquisition-related items include an $84 million pretax fair value adjustment to inventory recorded in the three-month period and $79 million of pretax transaction costs and change-in-control payments recorded in the nine-month period, in each case related to the acquisition of Masimo Corporation.

Raised Full-Year Outlook

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, with respiratory revenue expected to be an approximately 150 basis point headwind, resulting in core revenue growth of approximately 3.0%. Adjusted operating profit margin is forecast at approximately 29.5% for the quarter.

For full-year 2026, the company increased its adjusted diluted net earnings per common share guidance to a range of $8.57 to $8.62 from $8.45 to $8.60. Segment core sales growth forecasts call for a mid-single digit increase in Biotechnology for both the fourth quarter and full year, Life Sciences growth of 4.0% to 5.0% in the fourth quarter and 3.0% to 4.0% for the year, and Diagnostics up slightly in the fourth quarter and approximately flat for the year. Respiratory testing sales are forecast at approximately $400 million in the fourth quarter and approximately $1.5 billion for the full year.

Other stated assumptions include a currency impact on sales that is flat in the fourth quarter and increases sales by 1.0% for the full year, assuming exchange rates in effect as of September 25, 2026; amortization of acquisition-related intangible assets of approximately $500 million in the fourth quarter and $1.9 billion for the year; corporate expense of approximately $90 million in the fourth quarter and $355 million for the year; net interest expense of approximately $120 million in the fourth quarter and $305 million for the year; an effective tax rate of approximately 17.0% for both periods; and average adjusted diluted shares of approximately 707 million in the fourth quarter and 708 million for the year. The company states it does not reconcile forecasted non-GAAP measures to comparable GAAP measures because additional elements, including the impact of currency exchange rates on profitability, future acquisitions, divested product lines, discrete tax adjustments, impairments, gains and losses on investments and the outcome of legal proceedings, are difficult to predict and could be material to GAAP results.

President and Chief Executive Officer Julie Sawyer Montgomery stated that the company delivered “better-than-expected third quarter revenue, earnings and cash flow” and attributed double-digit adjusted EPS growth to improving trends across end markets and DBS-driven execution. Sawyer Montgomery, who referenced her transition into the CEO role, said Danaher’s opportunity is to become “the defining leader in Life Sciences and Diagnostics.”

Danaher scheduled its investor conference call for 8:00 a.m. Eastern Time on October 21, 2026, with a webcast and accompanying slide presentation on the Investors section of its website. A replay of the conference call is available until November 4, 2026.