Danaher (NYSE: DHR) posted earning results from the first full quarter following its $9.9 billion acquisition of Masimo, which fueled a 16.5% boost in its diagnostics segment sales — but the contribution comes as declines in respiratory testing continue to drag the company’s core revenues.
Still, the company largely met Wall Street’s expectations for the third quarter, with the report sending its stock up 7.6% to about $233 per share.
As a whole, diagnostics brought in $2.88 billion for the third quarter compared to 2025’s $2.46 billion. Minus the Masimo offset, core testing sales delivered 0.5% growth, weighed down by its respiratory portfolio largely backed by Cepheid’s screeners for COVID-19, respiratory syncytial virus and influenza.
While Danaher predicts those respiratory sales will tick up slightly during the upcoming U.S. flu season, it expects that unit to finish out the year with a total of $1.5 billion in sales, down about 20% from last year’s $1.9 billion.
All told — with 5.0% growth in biotechnology and 4.5% in its life sciences segments — the company posted 3.0% core revenue growth for the quarter, above analysts’ consensus forecast of 2.5%. That totaled up to $6.55 billion, with net income reaching $1.2 billion for a 34.5% year-over-year gain.
“We delivered better-than-expected third quarter revenue, earnings and cash flow, and are encouraged by the improving trends we saw across our end markets,” said Julie Sawyer Montgomery, who officially took the president and CEO role Oct. 1.
“Danaher has built a strong foundation, and the time I’ve spent with our teams and customers during my transition into the CEO role has only reinforced my conviction in the opportunities ahead,” Sawyer Montgomery added.
However, Danaher expects the headwinds from respiratory testing to slow company-wide growth through the remainder of 2026 — with diagnostics remaining flat annually versus the prior year — resulting in 3.0% growth for the fourth quarter that falls below Wall Street’s previous prediction of 5.2% for core revenues.
Earlier this month, Danaher’s Masimo claimed another win in federal court, regarding its long-running blood oxygen sensor patent dispute with Apple. The court added an additional $184 million in interest to the previous $634 million jury award.
