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Danaher (DHR) to Report Q2 Earnings: What's in the Cards?

Danaher CorporationDHR is slated to report second-quarter 2018 results on Jul 19, before the market opens.

The company pulled off an average positive earnings surprise of 4.09% over the preceding four quarters. Notably, Danaher's first-quarter 2018 adjusted earnings of 99 cents per share outpaced the Zacks Consensus Estimate of 93 cents.

Let's see how things are shaping up prior to this announcement.

Factors at Play

Danaher expects that stronger innovation investments, effective implementation of the Danaher Business System and successful integration of Integrated DNA Technologies (acquisition agreement inked in March 2018) will boost its revenues and profitability in the quarters ahead.

The Zacks Consensus Estimates for the company's Life Sciences and Environmental & Applied Solutions segments' revenues for the second quarter are currently pegged at $1,544 million and $1,073 million, respectively, higher than the corresponding tallies of $1,384 million and $983 million generated in the prior-year quarter.

Despite the aforementioned positives, we believe the Dental business' prevalent challenges and escalating cost are some major causes of concern for the company.

Realignment of relationships with certain manufacturers and distributors might continue to generate inventory modifications in Danaher's Dental segment's distribution channel, moving ahead. This, along with prolonged softness in the traditional consumables and equipment business, might weigh over the segment's revenues and profitability in the upcoming quarters. The Zacks Consensus Estimate for Danaher's Dental segment's revenues and operating profit for the April-June quarter is currently pegged at $723 million and $99 million, respectively.

Additionally, higher oil prices might continue to escalate Danaher's cost of sales by increasing its utilities and freight expenses.

Danaher currently anticipates to report adjusted earnings of $1.07-$1.10 per share in the to-be-reported quarter. This is based on a core top-line growth expectation of roughly 4%.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or at least 3 (Hold) for a likely earnings beat.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

That is not the case here as we will see below.

Zacks ESP & Rank: Danaher's favorable Zacks Rank #3 (Hold), when combined with an Earnings ESP of -0.10%, makes surprise predictions inconclusive.

Danaher Corporation Price and EPS Surprise

Danaher Corporation Price and EPS Surprise | Danaher Corporation Quote

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Align Technology, Inc. ALGN , with an Earnings ESP of +5.20% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Honeywell International Inc. HON , with an Earnings ESP of +0.21% and a Zacks Rank of 2.

United Technologies Corporation UTX , with an Earnings ESP of +1.04% and a Zacks Rank of 3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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