Danaher Corp. (DHR) posted better-than-expected fourth-quarter results and predicted a solid 2009 as acquisitions and a strong balance sheet offset what the manufacturer called general slowdowns in its diversified businesses.

The company, which makes products ranging from Craftsman tools to bar-code readers, leak-detection systems and dental equipment, said that while it was expecting a difficult year, it will continue to outperform and make acquisitions.

Shares jumped 10.1%, or $5.17, to $56.52 in recent trading as analysts remained bullish on the company.

Chief Executive H. Lawrence Culp Jr. said on a conference call with analysts that the company expected earnings for the first quarter between 70 cents and 80 cents a share, while analysts polled by Thomson Reuters had been looking for 78 cents a share.

The company also backed its previous view for the full-year at $3.70 to $4.10 a share. Analysts were looking for $3.79.

In the fourth-quarter, consumer weakness in segments such as orthodontic products and the Craftsman tool line, which it makes for Sears Holdings Corp. (SHLD), hampered results. But there was continued growth in the environmental and life-sciences segments.

The company also kept results high by adding in new businesses. Danaher bought six companies in the fourth quarter and 17 throughout all of 2008, and it doesn't expect to slow down in the new year.

"We believe the acquisition environment is becoming more attractive and that we are well positioned to capitalize," Culp said on the call. "We remain in excellent financial position."

Danaher posted fourth-quarter net income of $305.7 million, or 92 cents a share, down from $320.2 million, or 97 cents a share, a year earlier. Excluding restructuring and acquisition-related costs, earnings dipped to $1.11 a share from $1.12 a share. Last month, the company cut its earnings view to $1.03 to $1.10 a share. Analysts polled by Thomson Reuters expected earnings of $1.03 a share.

Revenue increased 1.3% to $3.18 billion. The company's core revenue, or growth from existing businesses, was down 1%. Analysts most recently expected $3.08 billion.

Gross margin rose to 54.3% from 53.8% despite high material costs, particularly steel prices, which it expects to get relief from in the new year.

Analysts said the results were especially impressive given the weak conditions.

"[The company] ... has made process improvement an art, we believe," said Wachovia analysts in a note. "Helping to manufacture "better, faster, and cheaper," the Danaher Business System ("DBS") affords [Danaher] a competitive advantage through process improvement, enhanced flow, and reduced cycle time."

Thanks to cost-saving measures and restructuring, Danaher also said it reduced its outstanding debt by $1.2 billion, and would have a stronger balance sheet for the new year.

The company said last month it would cut 1,700 jobs, or about 3.4% of its work force, and close 13 facilities, citing the global economic slowdown and the stronger U.S. dollar. Danaher also froze salaries and wages.

-By Kerry E. Grace and David Benoit, Dow Jones Newswires; 201-938-2472; david.benoit@dowjones.com;

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