DOW JONES NEWSWIRES 
 

Danaher Corp.'s (DHR) second-quarter income fell 19% on continued slumping demand despite a tax-related gain, and the industrial conglomerate known for its Sears' Craftman tools saw revenue miss expectations.

Manufacturers continue to see weak demand as customers remained slow to restock industries. But Danaher, unlike some of its rivals, hasn't slashed its 2009 forecasts yet.

Chief Executive H. Lawrence Culp Jr. said the company continues to see "significant headwinds" across most of its businesses because of the weak economy. He added the company was encouraged by its strong margins and free cash flow, and was continuing to aggressively cut costs. He didn't give further details.

The company posted income of $295.7 million, or 89 cents a share, down from $363.4 million, or $1.09 a share, a year earlier. The latest results included a net 9 cents in tax-related gains.

Revenue also decreased 19% to $2.67 billion.

Analysts polled by Thomson Reuters expected earnings of 88 cents and revenue of $2.78 billion.

Gross margin slipped to 47.2% from 47.5%.

The company so far hasn't hinted it will slow its pace of acquisitions. Danaher bought 17 companies last year. The company said in may it expected to be able to spend up to $6.5 billion on acquisitions in the next three years.

Some of Danaher's rivals that are typically aggressive acquirers, such as Illinois Tool Works Inc. (ITW), have lowered their acquisition expectations this year, citing companies' reluctance to sell when sales and profits are slumping.

Danaher's shares closed Wednesday at $64.08 and haven't traded premarket.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com