Danaher Corporation DHR is set to release first-quarter 2020 results on May 7, before market open.
The company delivered impressive results in the last four quarters, surpassing estimates in all occasions. Earnings surprise for the period was a positive 2.97%, on average. In the last reported quarter, the company’s earnings of $128 per share surpassed the Zacks Consensus Estimate of $1.26 by 1.59%.
In the past three months, its shares have fallen 1.7% compared with the industry’s decline of 23.2%.
Let us delve deeper.
Key Factors and Estimates for Q1
Danaher noted that the coronavirus outbreak had adverse impacts on demand for its products (mainly for instrument-oriented businesses) in first-quarter 2020 (toward the end). However, it witnessed healthy growth in other businesses, including Radiometer, Cepheid, Pall and ChemTreat.
For the first quarter, the company anticipates revenue growth of 3% from the year-ago reported figure. Core revenues (on a non-GAAP basis ) are expected to rise 4.5% year over year.
Contrary to the company’s expectations, the Zack Consensus Estimate for first-quarter revenues of $4,382 million suggests a 10.2% decline from the year-ago reported figure. Also, the quarterly revenues are estimated to decline 10% from the previous quarter. It is worth mentioning here that the company reported better-than-expected revenue results in three of the last four quarters, while lagged estimates in one. The positive sales surprise for the four quarters was 1.23%, on average.
On a segmental basis, Danaher expects improved year-over-year results for Life Sciences, Diagnostics, and Environmental & Applied Solutions for the first quarter of 2020.
The Zacks Consensus Estimate for the Diagnostics segment’s revenues for the first quarter is pegged at $1,608 million, indicating growth of 4.6% from the year-ago reported figure and a decline of 10.9% from the sequential reported number. Similarly, the consensus estimate for the Life Sciences segment is pegged at $1,695 million, suggesting a 4.2% year-over-year increase and an 11.5% sequential fall.
Also, the consensus estimate for sales of $1,089 million for the Environmental & Applied Solutions segment indicates a 3% increase from the year-ago reported number and a 5.1% decline from the previous quarter.
In addition to the above-mentioned factors, the company’s Danaher Business System (“DBS”), efficient workforce and inorganic activities are expected to have aided its performance in the first quarter. On the flip side, adverse impacts of unfavorable movements in foreign currencies, high costs, long-term obligations and regulatory restrictions are anticipated to have ailed.
Our proven model suggests 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 +5.00%, as the Most Accurate Estimate of $1.05 is below the Zacks Consensus Estimate of $1.00.
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.
Other Stocks That Warrant a Look
Here are some other companies that you may want to consider as according to our model, these too have the right combination of elements to post an earnings beat this quarter:
Ball Corporation BLL currently has an Earnings ESP of +1.56% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nordson Corporation NDSN presently has an Earnings ESP of +1.17% and a Zacks Rank #3.
Axon Enterprise, Inc. AAXN currently has an Earnings ESP of +18.31% and a Zacks Rank #3.
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