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UPDATE 1-Danaher CFO: Euro weakness could reduce earnings
June 6, 2012 / 2:05 PM / 5 years ago

UPDATE 1-Danaher CFO: Euro weakness could reduce earnings

* Euro weakness, if it continues, would reduce FY EPS by 5 cts

* Danaher seeing ‘pockets of weakness’-CFO

* Shares up 0.9 percent

By Nick Zieminski

NEW YORK, June 6 (Reuters) - The recent weakness of the euro against the U.S. dollar could push down Danaher Corp’s full-year earnings if it persists, the company’s finance chief said on Wednesday.

When the medical and industrial conglomerate reported quarterly results in late April, one euro bought around $1.30. The currency has since fallen to $1.24.

If that euro weakness continues, it would reduce Danaher’s full-year earnings by about 5 cents a share, Chief Financial Officer Daniel Komas told a JPMorgan investor conference in New York.

Analysts on average expect Danaher to earn $3.32 per share for the year.

The company generates nearly a quarter of its sales from Western Europe. A weaker euro reduces the value of European sales when they are translated into dollars.

The euro hit a two-year low against the dollar last week on fears that a European debt crisis may force Greece to exit the euro zone and that Spain may need to issue more debt to recapitalize its banks.

Komas said Danaher’s industrial businesses, such as test and measurement equipment, were one area of weakness in Europe, along with its life sciences business, which relies in part on government research budgets. However, demand for medical diagnostic equipment remains “pretty good” in Europe, he said.

Asked whether the current economic weakness felt like 2008, at the outset of recession, Komas said it did not.

“If you go back to the fall of ‘08, even the late summer, pre the Lehman bankruptcy, you saw a noticeable delta between orders and shipments,” he said. “It was a real sign things are going to turn south. We’re not seeing that. We’re seeing pockets of weakness.”

For Danaher, which has long relied on mergers and acquisitions to fuel growth, weak markets have a silver lining because they reduce asset prices.

“Every dynamic presents an opportunity,” Komas said.

Shares of Danaher were up 0.9 percent at $50.80 in early trading.

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