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Why Is Danaher (DHR) Up 3.9% Since the Last Earnings Report?
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More than a month has gone by since the last earnings report for Danaher Corporation (DHR - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Danaher Beats on Q3 Earnings & Revenues, Guides Well
Danaher reported adjusted earnings of $1.00 a share in third-quarter 2017, beating the Zacks Consensus Estimate of 95 cents by 5%. Notably, adjusted earnings increased 13% on a year-over-year basis.
The improvement in the company’s bottom line can largely be attributed to Danaher Business System (“DBS”) that focuses on three critical areas -- quality, delivery, and cost & innovation. Moreover, a decent top-line performance led to mid-teens adjusted earnings per share growth, strong margin expansion and cash flow during the quarter.
Inside The Headlines
The company reported total sales of $4,528.2 million, reflecting an increase of 9.6% year over year. Moreover, the sales figure surpassed the Zacks Consensus Estimate of $4,460 million. Also, core businesses grew 3% year over year, partially offset by adverse effect of currency translation.
Life Sciences revenues recorded an increase of 5.1% year over year to $1,393 million. Operating margin for the quarter increased 230 basis points (bps) to 17.7%. Impressive growth in operating margin came on the back of increased sales volumes. Revenues at the Diagnostics segment increased 19.5% year over year to $1,449 million. Also, operating margin at the segment increased 80 bps year over year to 16.8%.
Revenues at Dental were up 2.7% year over year to $694 million. However, operating margin decreased 30 bps to 14.7%. The Environmental & Applied Solutions segment witnessed revenue growth of 8.2% year over year to $993 million. However, operating margin declined 190 bps to 22.4% on a year-over-year basis.
On a year-over-year basis, operating profit margin remained at 16.9%.
Liquidity
Danaher exited the third quarter of 2017 with free cash flow of $935.4 million compared with the year-ago figure of $703.4 million.
Outlook
Concurrent with the earnings release, Danaher provided its guidance for fourth-quarter 2017. The company projects adjusted earnings per share in the range of $1.12–$1.16.
Moreover, Danaher raised its full-year 2017 adjusted earnings guidance. The company currently expects adjusted net earnings per share in the band of $3.96–$4.00 compared with the previous guided range of $3.90–$3.97. The company reported impressive key metrics largely driven by its effective business model, DBS.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
VGM Scores
Currently, the stock has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Why Is Danaher (DHR) Up 3.9% Since the Last Earnings Report?
More than a month has gone by since the last earnings report for Danaher Corporation (DHR - Free Report) . Shares have added about 3.9% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Danaher Beats on Q3 Earnings & Revenues, Guides Well
Danaher reported adjusted earnings of $1.00 a share in third-quarter 2017, beating the Zacks Consensus Estimate of 95 cents by 5%. Notably, adjusted earnings increased 13% on a year-over-year basis.
The improvement in the company’s bottom line can largely be attributed to Danaher Business System (“DBS”) that focuses on three critical areas -- quality, delivery, and cost & innovation. Moreover, a decent top-line performance led to mid-teens adjusted earnings per share growth, strong margin expansion and cash flow during the quarter.
Inside The Headlines
The company reported total sales of $4,528.2 million, reflecting an increase of 9.6% year over year. Moreover, the sales figure surpassed the Zacks Consensus Estimate of $4,460 million. Also, core businesses grew 3% year over year, partially offset by adverse effect of currency translation.
Life Sciences revenues recorded an increase of 5.1% year over year to $1,393 million. Operating margin for the quarter increased 230 basis points (bps) to 17.7%. Impressive growth in operating margin came on the back of increased sales volumes. Revenues at the Diagnostics segment increased 19.5% year over year to $1,449 million. Also, operating margin at the segment increased 80 bps year over year to 16.8%.
Revenues at Dental were up 2.7% year over year to $694 million. However, operating margin decreased 30 bps to 14.7%. The Environmental & Applied Solutions segment witnessed revenue growth of 8.2% year over year to $993 million. However, operating margin declined 190 bps to 22.4% on a year-over-year basis.
On a year-over-year basis, operating profit margin remained at 16.9%.
Liquidity
Danaher exited the third quarter of 2017 with free cash flow of $935.4 million compared with the year-ago figure of $703.4 million.
Outlook
Concurrent with the earnings release, Danaher provided its guidance for fourth-quarter 2017. The company projects adjusted earnings per share in the range of $1.12–$1.16.
Moreover, Danaher raised its full-year 2017 adjusted earnings guidance. The company currently expects adjusted net earnings per share in the band of $3.96–$4.00 compared with the previous guided range of $3.90–$3.97. The company reported impressive key metrics largely driven by its effective business model, DBS.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
VGM Scores
Currently, the stock has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.