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Will Cost Headwinds Dampen Danaher's (DHR) Q2 Earnings?

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Danaher Corporation (DHR - Free Report) is scheduled to release second-quarter 2022 earnings numbers on Jul 21, before market open.

The Zacks Consensus Estimate for DHR’s second-quarter earnings has been revised downward by 5.2% in the past 90 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 11%.

Let’s see how things are shaping up for Danaher this earnings season.

Danaher Corporation Price and EPS Surprise

Danaher Corporation Price and EPS Surprise

Danaher Corporation price-eps-surprise | Danaher Corporation Quote

Factors to Note

Healthy demand for bioprocessing products is expected to have aided Danaher’s Life Sciences segment. The Zacks Consensus Estimate for Life Sciences segment’s total sales in the second quarter indicates a 4% increase from the year-ago reported figure.

The Diagnostics segment revenues are likely to have been driven by healthy demand for products related to molecular testing and higher non-COVID testing volumes. Healthy consumables business and solid demand for equipment areexpected to have boosted revenues of the Environmental & Applied Solutions segment. The Zacks Consensus Estimate for second-quarter Environmental & Applied Solutions’ total sales hints at a 1.4% rise from the second-quarter 2021 reported figure.

Danaher expects year-over-year core revenue growth in the range of low-single digits for the second quarter. The company expects the impact of COVID-related testing to have boosted sales in the low-single digits in the to-be-reported quarter.

However, inflationary pressure and supply chain woes might have impacted Danaher’s margin performance in the second quarter. High cost of sales, selling, general and administrative expenses and research and development expenses might have impeded DHR’s bottom-line performance.

What Does the Zacks Model Say?

Our proven model does not 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 chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Danaher has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.36. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Danaher carries a Zacks Rank #3.

Highlights of Q1 Earnings

Danaher’s first-quarter adjusted earnings of $2.76 per share surpassed the Zacks Consensus Estimate of $2.65. The bottom line increased 9.5% from the year-ago quarter’s figure of $2.52, primarily on sales growth. The company’s net sales of $7,688 million surpassed the Zacks Consensus Estimate of $7,546 million. Solid segmental performances boosted DHR’s top line on a year-over-year basis.

Stocks to Consider

Here are some companies that you may want to consider as, according to our model, these have the right combination of elements to beat on earnings in this reporting cycle.

Crane Holdings (CR - Free Report) has an Earnings ESP of +6.98% and a Zacks Rank #2. The company is slated to release second-quarter 2022 financial numbers on Jul 25.

Crane Holdings’ earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 22.2%.

Zebra Technologies (ZBRA - Free Report) has an Earnings ESP of +2.15% and a Zacks Rank #3. The company is scheduled to release second-quarter 2022 earnings numbers on Aug 2.

Zebra Technologies’ earnings have trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 8.8%.

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