Danaher Corp. (NYSE:DHR)

Gross profit margin

The gross profit margin demonstrates a generally positive trend from April 2, 2021, beginning at 55.98%, and gradually increasing to a peak of 60.95% by April 1, 2022. Subsequently, this metric stabilizes around the low 60% range, slightly declining toward the end of the observed period but remaining above 58%. The fluctuations are minor, indicating a consistent level of efficiency in cost of goods sold relative to revenue over the quarters.

Operating profit margin

The operating profit margin shows a pronounced upward trend from 18.99% in April 2, 2021, rising sharply to a peak of 27.61% by March 31, 2022. After this high point, the margin declines progressively in subsequent periods, ending near 20.26% in March 28, 2025. This pattern suggests initially improving operating efficiency or higher operating leverage, followed by a period of margin compression or increased operating expenses.

Net profit margin

The net profit margin follows a similar trajectory to the operating margin, increasing from 16.36% in April 2, 2021, reaching a maximum of 23.32% by June 30, 2023. After the peak, there is a steady decrease down to 15.81% by March 28, 2025. This indicates that net profitability improved significantly through mid-2023 but faced declines thereafter, possibly due to rising costs, taxes, interest expenses, or one-time charges impacting net income.

Return on equity (ROE)

ROE shows a rising trend from 9.17% in April 2, 2021, climbing to 14.4% by December 31, 2022. Following this peak, ROE declines steadily through the observation period, finishing at 7.4% by March 28, 2025. This decline points to a reduction in the company's efficiency in generating profits from shareholders' equity after a period of strong performance, potentially linked to lower net income or increased equity base without proportional profit increases.

Return on assets (ROA)

The ROA increases from 4.79% in April 2, 2021, reaching a high of 8.55% at March 31, 2023. Thereafter, it diminishes to 4.76% by March 28, 2025. The initial growth in ROA indicates improved asset utilization or profitability, while the subsequent decline may reflect reduced operational efficiency or asset base expansion not matched by income growth.

Gross Profit Trend

The gross profit initially shows a growth trajectory from April 2020 to December 2021, rising from 2443 million USD to a peak of 4943 million USD. After this peak, fluctuations are observed, with gross profit decreasing significantly in the first quarter of 2023 to 3662 million USD, followed by a continued decline until September 2023 reaching 3275 million USD. Subsequently, a recovery phase occurs from the fourth quarter of 2023 through December 2024, where gross profit trends upward again to 3890 million USD, before a slight reduction to 3511 million USD in the first quarter of 2025.

Sales Trend

Sales exhibit a consistent upward movement from April 2020, starting at 4343 million USD, reaching a high of 8369 million USD in December 2022. Post this peak, sales show a considerable decline in early 2023, dropping to 5949 million USD and continuing to decrease until September 2023 to 5624 million USD. A marked recovery happens from the fourth quarter of 2023 through December 2024, with sales increasing to 6538 million USD, followed by a decline to 5741 million USD in the first quarter of 2025.

Gross Profit Margin Analysis

The gross profit margin is available from December 2020 onwards, starting at 55.98%. It steadily increases, peaking around 60.95% in December 2021, and then remains relatively stable around the 60.2% to 59.17% range through 2022. From early 2023, the margin experiences a slight downward trend, reaching a low near 58.39% by June 2024. The metric then recovers modestly towards the end of 2024 and into early 2025, climbing to approximately 59.74% by March 2025. Overall, the margin exhibits resilience despite fluctuations in sales and gross profit figures.

Combined Observations

Both gross profit and sales demonstrate a cyclical pattern with peaks near the end of 2021 or beginning of 2022, followed by declines during 2023, and recoveries in late 2023 through 2024. The gross profit margin has maintained stability in the high 50 to low 60 percent range throughout the period with only mild volatility. The pattern suggests that while top-line sales and gross profit amounts have experienced substantial variation, operational efficiency as indicated by the gross profit margin has been relatively consistent. This stability in margin percentage indicates the company’s ability to manage cost of goods sold effectively despite fluctuations in revenue.

The financial data reveals notable variations and trends in operating profit, sales, and operating profit margin over the periods analyzed. Key observations from the quarterly figures provide valuable insights into the company's performance dynamics.

Operating Profit

The operating profit shows a general growth trend with fluctuations. It started at 698 million US$ in early April 2020, increasing steadily to peak at 2,296 million US$ by the end of December 2022. Following this peak, the operating profit experienced a decline through 2023, with values falling to 1,163 million US$ by June 2023. Thereafter, a moderate recovery occurred, reaching 1,425 million US$ by the end of December 2024, though this is still substantially lower than the earlier peak.

Sales

Sales demonstrated consistent growth from 4,343 million US$ in April 2020 to a peak of 8,369 million US$ at the close of December 2022. However, from early 2023 onwards, a notable decrease is observed with sales dropping to 5,624 million US$ by September 2023. Although there was a subsequent rebound, sales figures remain below the previous peak, standing at 6,538 million US$ by December 2024 and decreasing again to 5,741 million US$ by March 2025.

Operating Profit Margin

The margin values commence being reported from December 2020, starting at 18.99%, and exhibit a generally high level through the following quarters. The margin reached its highest point at 27.61% in December 2022, indicating increased profitability relative to sales at that time. Post-peak, a gradual decline is noted over the subsequent quarters, stabilizing around 20-21% towards the end of the data period.

Overall, the data indicates that while the company achieved significant growth in operating profit and sales through 2022, challenges emerged in 2023 leading to reduced profitability and sales volume. Margins remained robust but showed signs of normalization following a period of elevated profitability. The partial recovery toward the end of the period suggests some stabilization but at levels below the peak performance observed in late 2022.

Net Earnings

Net earnings exhibited fluctuating patterns over the reported periods. Starting at 595 million USD in April 2020, earnings generally increased, peaking at 1788 million USD by December 2021. Subsequently, net earnings declined with some volatility, reaching a low of 818 million USD by September 2024 before partially recovering to 954 million USD by December 2024. This indicates a period of growth followed by a contraction and mild recovery towards the end of the dataset.

Sales

Sales showed a generally upward trend from April 2020 to December 2021, rising from 4343 million USD to 8148 million USD. After this peak, sales figures moderated with fluctuations between approximately 5600 and 6500 million USD from March 2023 through March 2025. This suggests a strong growth phase interrupted by a period of relative stabilization or mild decline in sales volumes in more recent quarters.

Net Profit Margin

The net profit margin, available from December 2020 onward, began around 16.36% and improved steadily, reaching its highest mark of 23.32% in March 2023. After this peak, the margin declined consistently each quarter, ending at 15.81% by March 2025. This trend reflects an initial improvement in profitability efficiency, followed by a gradual erosion of profit margins in later periods.

Overall Financial Performance Trends

The data points to a strong growth phase for net earnings and sales through late 2021. However, post-2021, both key metrics showed signs of stagnation or decline, with net earnings being more volatile. Despite relatively stable sales in the more recent periods, the downward trend in net profit margin suggests rising costs or pricing pressures affecting overall profitability. The simultaneous decline in net earnings and profit margin signals potential challenges in maintaining profitability despite steady sales volumes.

Net Earnings

Net earnings exhibit notable fluctuations across the periods analyzed. Beginning at 595 million USD in April 2020, the earnings increased substantially to peak at 1785 million USD by July 2021. A sharp decline followed in October 2021, dropping to 1158 million USD, but recovering quickly to reach 2232 million USD by December 2022, marking the highest point in the timeframe. Subsequently, net earnings trended downward, reaching a low of 818 million USD in September 2024 before experiencing a modest recovery to 954 million USD by March 2025. Overall, the pattern reflects periods of strong growth interrupted by pronounced declines and partial recoveries.

Total Danaher Stockholders’ Equity

Total equity shows a general upward trend throughout the periods, starting from 31,055 million USD in April 2020 and increasing steadily to a peak of 53,486 million USD by December 2023. Thereafter, equity levels exhibit some volatility with a slight decrease noted in the last periods, ending at 50,849 million USD in March 2025. Despite these minor contractions, the overall trajectory remains positive with a substantial increase over the entire time span.

Return on Equity (ROE)

ROE demonstrates an improving trend from the available data starting in December 2020 at 9.17%. It rose steadily, reaching a peak of 14.4% by December 2022. Following the peak, ROE experienced a consistent decline, falling to 7.4% by March 2025. This indicates that while the company initially improved its efficiency in generating earnings from equity, operational or market conditions in the latter periods reduced profitability relative to equity.

Summary of Trends and Insights

The data show a company that managed significant earnings growth during 2020-2022, reflected in peaks in both net earnings and ROE. However, the earnings and ROE started to decline after late 2022, suggesting challenges in maintaining profitability despite stable and increasing equity levels. The equity base grew steadily, signifying consistent investment or retained earnings, but the reduced ROE suggests a diminishing return on that capital in recent periods. These dynamics warrant further examination of operational factors or market conditions influencing profitability post-2022.

The net earnings exhibit a fluctuating pattern throughout the observed periods. Initially, net earnings increased significantly from 595 million to 1785 million US dollars between April 2020 and July 2021, reaching a peak in early 2021. This was followed by a sharp decline in October 2021 to 1158 million, before recovering again to a high of 2232 million in December 2022. After this peak, net earnings entered a downward trend with moderate fluctuations, decreasing to 954 million by March 2025. The overall pattern suggests volatility with periods of strong growth followed by corrections.

Total assets demonstrate a generally stable yet slightly increasing trend over the period. Starting at 68,930 million US dollars in April 2020, the assets rose steadily until December 2021, reaching above 83,000 million. Thereafter, total assets fluctuated but remained in the range of roughly 77,500 to 87,700 million with no clear directional trend toward significant growth or decline by March 2025. This relative steadiness indicates a stable asset base with moderate adjustments over time.

The Return on Assets (ROA) percentage, available from December 2020 onwards, reveals an initial upward trajectory. ROA increased from 4.79% in December 2020 to a peak of 8.55% in March 2023, indicating improving efficiency in utilizing assets to generate earnings. Following this peak, ROA declined gradually through subsequent quarters to 4.76% by March 2025. This decline suggests that despite the relatively stable asset base, the company's ability to generate net earnings from those assets has weakened somewhat in the most recent periods.

Net Earnings

Strong initial growth peaking in late 2022, followed by volatility and a general decline through early 2025.

Total Assets

Gradual increase until late 2021, then stable with minor fluctuations, indicating a consistent asset base.

Return on Assets (ROA)

Improved significantly until early 2023, then gradually decreased, reflecting diminishing asset profitability.