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The comparisons with 2022 continue to hurt shares of Danaher (DHR). For the second quarter, reported Monday, July 24, the company saw revenue down 8% and adjusted earnings per share off 26% year over year.

The culprit is easy to see. In 2022 Danaher’s biotechnology unit, which provides production tools for drug makers, saw a 17% drop in revue as existing customers among vaccine makers drew down inventory and as new customers slowed buying as money got tight for young biotech companies. The company’s diagnostics segment, which saw revenue increase from Covid-19 testing, saw revenue drop 12% year over year. Narrowing margins led to the bigger drop in earnings. Free cash flow, however fell only 7% year over year.

Management cut its guidance to show a decline in core revenue in the high single digits to low double digits (down from a high-single-digit decline expected previously). The company also reduced its operating margin assumption by about 100 basis points on this deleveraging.

What’s important to investors though is the the market continues to look past this post-Covid reset and to anticipate a return to the long term low-double-digit earnings growth. The stock fell just 0.93% today on the earnings and guidance news and the shares are down just 2.60% for 2023 as of the close on July 24.

I continue to hold Danaher in my Jubak Picks Portfolio where the position, initiated on June 20, 2017, was up 198.3% as of the close on July 25. On July 26, I added these shares to my long-term 50 Stocks portfolio. Danaher is one way to play the growth of the drug sector and the need of these companies for pure water.