Benzinga | Oct 21, 2020 10:13AM EDT

Earnings Preview: Danaher

On Thursday, October 22, Danaher (NYSE: DHR) will release its latest earnings report. Benzinga's outlook for Danaher is included in the following report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings, also known as net income, is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Danaher reporting earnings of $1.36 per share on sales of $5.51 billion. Danaher EPS in the same period a year ago totaled $1.16. Sales were $5.04 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Thursday, earnings would be up 17.24%. Revenue would be up 9.39% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019EPS Estimate 1.08 1.01 1.25 1.15EPS Actual 1.44 1.05 1.28 1.16Revenue Estimate 4.94 B 4.29 B 4.79 B 5.02 BRevenue Actual 5.30 B 4.34 B 4.87 B 5.04 B

Stock Performance

Shares of Danaher were trading at $227.095 as of October 20. Over the last 52-week period, shares are up 68.0%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.