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Danaher (DHR) to Post Q4 Earnings: What's in the Offing?

Zacks Equity Research

Danaher Corporation DHR is set to release fourth-quarter 2019 results on Jan 30, before the market opens.

The company delivered impressive results in the last four quarters, surpassing estimates in all occasions. Earnings surprise for the period was a positive 2.77%, on average. In the last reported quarter, the company’s earnings of $1.16 per share surpassed the Zacks Consensus Estimate of $1.15 by 0.87%.

In the past three months, the company’s shares have gained 17.4% compared with the industry’s growth of 10.6%.




Let us delve deeper.

Key Factors and Estimates

Over time, the effective implementation of Danaher Business System (“DBS”) has been benefiting the company through an increased focus on superior product quality, product innovation, enhancing shareholder value and building efficient workforce.

In addition, gains from solid demand for products and acquired assets might get reflected in fourth-quarter results. Also, divestment of the dental business (completed in September 2019) is believed to have worked in the best interest of shareholders.

On the flip side, unfavorable movements in foreign currencies as well as high costs and operating expenses adversely impacted the company’s performance in the first three quarters of 2019. This trend is likely to have continued in the fourth quarter.

This month, Danaher communicated that gains from better performances of its Diagnostics and Life Sciences segments might get reflected in its results. It expects fourth-quarter organic sales growth to be above 4.5% stated previously. Adjusted earnings for the quarter will either meet or exceed the higher end of $1.32-$1.35 mentioned earlier.

The Zack Consensus Estimate for the company’s fourth-quarter earnings per share is pegged at $1.25, indicating a 2.3% decline from the year-ago reported figure and a 7.8% increase sequentially. Also, the consensus estimate for revenues of $4,787 million suggests a 10.8% decrease from the year-ago quarter’s reported number and a 5% decline from the last reported quarter.

Life Sciences’ performance in the third quarter was driven by product introductions, strengthening business in major geographies and acquired assets. The trend is likely to have continued in the fourth quarter. The Zacks Consensus Estimate for the segment’s fourth-quarter sales is pegged at $1,872 million, indicating 4.3% rise from the year-ago reported figure and 10.4% increase from the previous quarter’s number.

Diagnostics’ solid product offerings and international presence benefited in the third quarter, a trend that is expected to have continued in the fourth quarter as well. The Zacks Consensus Estimate for the segment’s revenues for the fourth quarter is pegged at $1,771 million, indicating growth of 5.1% from the year-ago reported figure and 10.5% increase from the sequential reported number.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Danaher this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an earnings ESP of -0.14%, as the Most Accurate Estimate of $1.24 is below the Zacks Consensus Estimate of $1.25.

Danaher Corporation Price, Consensus and EPS Surprise

 

Danaher Corporation Price, Consensus and EPS Surprise

Danaher Corporation price-consensus-eps-surprise-chart | Danaher Corporation Quote

Zacks Rank: Danaher currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies that you may want to consider as according to our model, these have the right combination of elements to post an earnings beat this quarter:

Tennant Company TNC presently has an Earnings ESP of +4.20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Honeywell International Inc. HON currently has an Earnings ESP of +0.49% and a Zacks Rank #3.

Plug Power, Inc. PLUG presently has an Earnings ESP of +8.33% and a Zacks Rank #3.

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Danaher Corporation (DHR) : Free Stock Analysis Report
 
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