Short answer: nobody knows.
Long answer:
You deal a certain amount of damage, and a certain amount of that damage is absorbed by armor.
As far as I know, nobody knows the precise formula.
It's possible for more than half your potential damage to be absorbed by armor. In that case, the damage number will be smaller than the 'absorbed' number.
Keep in mind, that you can also deal more than one type of damage at the same time.
Physical damage is white, every other type of damage is colored based on its element.