Danaher Corp. (DHR) shares surged to an all-time high Thursday after the medical equipment maker said it would spin off its dental business into a separate, publicly-listed company.
Danaher said the deal, which will close in the second half of next year, will be run by its current boss, Amir Aghdaei, who has guided that portion of the business to sale of around $3 billion a year, around 16% of Danaher's overall group sales. The spin-off announcement, which is expected to be tax-free for shareholders, follows stronger-than-expected second quarter earnings of $637.8 million, or $1.15 cents a share on an adjusted diluted basis, a figure that marks a 20% rise from the same period last year but missed the $1.09 consensus forecast.
"We had an outstanding second quarter, with the team delivering results ahead of expectations," said CEO Thomas Joyce. "We achieved 6.0% core revenue growth, healthy margin expansion, mid-teens adjusted earnings per share growth, and strong cash flow. Our performance was broad-based, with four of our five platforms delivering mid-single digit or better core revenue growth, and we believe we are taking market share in many of our businesses."
Action Alerts Plus holding Danaher shares were marked 5.94% higher in pre-market trading in New York Thursday, indicating an opening bell price of $104.65 each, a move that extended its year-to-date gain past 14% and values the Washington, DC-based group at just over $74 billion.
Danaher said its "core" sales, which it defines as GAAP revenues from continuing operations that exclude currency and M&A impacts, rose 6%, which its overall reported top line advanced 10.5% from the same period last year to $5 billion.