We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Danaher (DHR) Up 1.9% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Danaher (DHR - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Danaher 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 Tops Earnings Estimates in Q3, Raises '18 View
Danaher reported better-than-expected bottom-line results for the third quarter of 2018, delivering a positive earnings surprise of 2.8%. This is the company's 11th consecutive quarter of impressive results.
The company's adjusted earnings in the reported quarter were $1.10 per share, surpassing the Zacks Consensus Estimate of $1.07. Moreover, the bottom line increased 10% from the year-ago quarter's tally of $1.00. The upside can be primarily attributed to sales growth and improved operating income.
Organic Sales and Buyouts Drive Revenues
In the quarter under review, Danaher's net sales were $4,853.1 million, up 7.2% from the year-ago quarter’s figure. Organic sales in the quarter grew 6.5% and acquired assets had a positive 2% impact. However, foreign currency translations had a negative impact of 1.5%.
Also, the top line surpassed the Zacks Consensus Estimate of $4,811 million by 0.9%.
The company reports its net sales in four segments — Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions. The segmental information is briefly discussed below:
Revenues in the Life Sciences segment were $1,596.7 million, increasing 14.5% year over year. Results were driven by 6.5% gain from acquired assets and 9.5% growth in core sales, partially offset by 1.5% adverse impact from foreign currency translations.
Revenues in Diagnostics totaled $1,502.5 million, increasing 3.5% year over year. The improvement came on the back of 5.5% increase in core sales, which was partially offset by 2% negative impact from foreign currency translations.
Revenues in the Dental segment totaled $679.5 million, reflecting year-over-year decline of 2%. Core sales declined 0.5% and foreign currency translations had 1.5% negative impact.
It's worth mentioning here that Danaher intends to spin-off its Dental business segment into an independent publicly-trading company — DentalCo — by second-half 2019.
Revenues from Environmental & Applied Solutions totaled $1,074.4 million, increasing 8% year over year. The improvement came on the back of 8% increase in core sales and 1.5% positive impact from acquired assets. However, foreign currency translations had an adverse 1.5% impact.
Mixed Margin Profile
In the quarter under review, Danaher's cost of sales increased 8.6% year over year to $2,162.6 million. It represented 44.6% of net sales compared with 44% in the year-ago quarter. Gross margin in the quarter declined 60 basis points (bps) year over year to 55.4%.
Selling, general and administrative expenses increased 4% year over year to $1,558.6 million. It represented 32.1% of net sales. Research and development expenses were $301.2 million, up 7.9% year over year. It represented 6.2% of net sales.
Operating income in the quarter under review increased 9.4% year over year to $830.7 million. Operating margin grew 30 bps year over year to 17.1%. The margin improvement includes 50 bps contribution from core business and 20 bps adverse impacts from acquisitions.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and cash equivalents of $776.2 million, down roughly 14.1% from $904 million at the end of the last reported quarter. Long-term debt balance declined 5.3% sequentially to $10,558 million.
In the first nine months of 2018, the company generated net cash of $2,787.4 million from operating activities, up 5.5% from the year-ago period’s level. Capital used for purchasing property, plant and equipment totaled $441.3 million, down 1% from the year-ago period. Free cash flow grew 5.2% year over year to $2,344.7 million.
Danaher paid dividends worth $321.2 million to shareholders in the first nine months of 2018.
Outlook
In the quarters ahead, Danaher anticipates continuing to realize gains from Danaher Business System initiatives. These efforts have enabled the company to focus more on product innovation, superior product quality, building efficient workforce and enhancing shareholder value.
For the third quarter of 2018, Danaher anticipates adjusted earnings in the range of $1.25-$1.28 per share.
For the full year, the company raised adjusted earnings per share projection to $4.49-$4.52 from the previous forecast of $4.43-$4.50.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Danaher has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Danaher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Danaher (DHR) Up 1.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Danaher (DHR - Free Report) . Shares have added about 1.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Danaher 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 Tops Earnings Estimates in Q3, Raises '18 View
Danaher reported better-than-expected bottom-line results for the third quarter of 2018, delivering a positive earnings surprise of 2.8%. This is the company's 11th consecutive quarter of impressive results.
The company's adjusted earnings in the reported quarter were $1.10 per share, surpassing the Zacks Consensus Estimate of $1.07. Moreover, the bottom line increased 10% from the year-ago quarter's tally of $1.00. The upside can be primarily attributed to sales growth and improved operating income.
Organic Sales and Buyouts Drive Revenues
In the quarter under review, Danaher's net sales were $4,853.1 million, up 7.2% from the year-ago quarter’s figure. Organic sales in the quarter grew 6.5% and acquired assets had a positive 2% impact. However, foreign currency translations had a negative impact of 1.5%.
Also, the top line surpassed the Zacks Consensus Estimate of $4,811 million by 0.9%.
The company reports its net sales in four segments — Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions. The segmental information is briefly discussed below:
Revenues in the Life Sciences segment were $1,596.7 million, increasing 14.5% year over year. Results were driven by 6.5% gain from acquired assets and 9.5% growth in core sales, partially offset by 1.5% adverse impact from foreign currency translations.
Revenues in Diagnostics totaled $1,502.5 million, increasing 3.5% year over year. The improvement came on the back of 5.5% increase in core sales, which was partially offset by 2% negative impact from foreign currency translations.
Revenues in the Dental segment totaled $679.5 million, reflecting year-over-year decline of 2%. Core sales declined 0.5% and foreign currency translations had 1.5% negative impact.
It's worth mentioning here that Danaher intends to spin-off its Dental business segment into an independent publicly-trading company — DentalCo — by second-half 2019.
Revenues from Environmental & Applied Solutions totaled $1,074.4 million, increasing 8% year over year. The improvement came on the back of 8% increase in core sales and 1.5% positive impact from acquired assets. However, foreign currency translations had an adverse 1.5% impact.
Mixed Margin Profile
In the quarter under review, Danaher's cost of sales increased 8.6% year over year to $2,162.6 million. It represented 44.6% of net sales compared with 44% in the year-ago quarter. Gross margin in the quarter declined 60 basis points (bps) year over year to 55.4%.
Selling, general and administrative expenses increased 4% year over year to $1,558.6 million. It represented 32.1% of net sales. Research and development expenses were $301.2 million, up 7.9% year over year. It represented 6.2% of net sales.
Operating income in the quarter under review increased 9.4% year over year to $830.7 million. Operating margin grew 30 bps year over year to 17.1%. The margin improvement includes 50 bps contribution from core business and 20 bps adverse impacts from acquisitions.
Balance Sheet and Cash Flow
Exiting the third quarter, Danaher had cash and cash equivalents of $776.2 million, down roughly 14.1% from $904 million at the end of the last reported quarter. Long-term debt balance declined 5.3% sequentially to $10,558 million.
In the first nine months of 2018, the company generated net cash of $2,787.4 million from operating activities, up 5.5% from the year-ago period’s level. Capital used for purchasing property, plant and equipment totaled $441.3 million, down 1% from the year-ago period. Free cash flow grew 5.2% year over year to $2,344.7 million.
Danaher paid dividends worth $321.2 million to shareholders in the first nine months of 2018.
Outlook
In the quarters ahead, Danaher anticipates continuing to realize gains from Danaher Business System initiatives. These efforts have enabled the company to focus more on product innovation, superior product quality, building efficient workforce and enhancing shareholder value.
For the third quarter of 2018, Danaher anticipates adjusted earnings in the range of $1.25-$1.28 per share.
For the full year, the company raised adjusted earnings per share projection to $4.49-$4.52 from the previous forecast of $4.43-$4.50.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Danaher has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Danaher has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.