How did DHR's Q1 2024 earnings surprise investors?

Danaher's (DHR) Q1 2024 earnings report reflected a challenging environment for the company, leading to mixed reactions from investors. 1. **Financial Performance**: Danaher reported a decline in non-GAAP core revenue, which decreased by high-single digits year-over-year in Q1 2024, compared to the expectations of a low-single-digit decline for the full year 2024. This indicated a more significant contraction in revenue during the quarter than anticipated, which likely contributed to investor disappointment. 2. **Market Sentiment**: The company's stock price fell nearly 4% before the bell as investors digested the news of the revenue forecast and the transition of the pandemic to an endemic state, which reduced demand for Danaher's products. This decline reflected broader market concerns about the impact of the pandemic's evolution on Danaher's long-term growth prospects. 3. **Investor Concerns**: The decline in revenue was attributed to a slowdown in growth in China, a funding crunch in biotech, and rising interest rates, which squeezed funding needed for drug development programs. These factors raised questions about Danaher's ability to sustain growth in the near term, adding to investor uncertainty. 4. **Respiratory Testing Segment Strength**: Despite the overall decline, Danaher's respiratory testing segment performed well, driven by a seasonal increase in respiratory infections caused by COVID-19 or respiratory syncytial virus. The diagnostics segment that makes COVID-19 and DNA-based testing kits recorded better-than-expected sales, which may have provided some relief to investors concerned about the impact of declining COVID-related demand. In conclusion, while Danaher's Q1 2024 earnings report highlighted resilience in certain segments, the overall revenue decline and cautious outlook for the year ahead led to a negative reaction from investors. The company's ability to navigate the evolving pandemic landscape and sustain growth in non-respiratory segments will be key factors for investors moving forward.