Industrial and healthcare conglomerate Danaher Corp (DHR.N) reported lower-than-expected quarterly results on Thursday and cut its forecast for the year, saying it would spend more to restructure operations.
"Clearly the macroeconomic headlines are having an impact on our growth," Chief Executive Larry Culp told analysts. "The operating environment is likely to remain challenging."
Another U.S. recession was possible but would probably be more muted, Culp said.
Third-quarter net earnings rose 5 percent to $548.7 million, or 77 cents per share, from $523.4 million, or 73 cents per share, a year earlier.
The Washington-based maker of medical technology, dental tools and water treatment equipment said sales had dipped to $4.42 billion from $4.45 billion, largely because of currency fluctuations. Sales were up in emerging markets, including China, but fell in the United States and Western Europe.
Analysts on average had expected Danaher to earn 79 cents a share on sales of $4.51 billion, according to Thomson Reuters I/B/E/S.
Danaher's environmental and industrial businesses posted higher revenue. The company's biggest segment, which supplies equipment and software to hospitals and medical labs, showed slightly lower sales but sharply higher operating profits, helped by cost cuts and fewer charges tied to last year's acquisition of Beckman Coulter.
More cost reductions are coming. Danaher said it would spend $120 million on restructuring this year, $20 million more than it had previously estimated. Most of those expenses will be incurred in the fourth quarter.
Danaher's estimate of fourth-quarter earnings between 80 cents and 85 cents a share was below analysts' expectations of 88 cents.
The company cut its 2012 profit forecast by 5 cents to a range of $3.14 to $3.19. Wall Street was looking for $3.23.
Danaher's shares fell 4.70 percent, or $2.65, to $53.48 in early trading.
(Reporting by Nick Zieminski in New York; Editing by Lisa Von Ahn and Maureen Bavdek)