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Phibro (PAHC) Q2 Earnings Top Estimates, Gross Margin Up
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Phibro Animal Health (PAHC - Free Report) delivered adjusted earnings per share (EPS) of 34 cents in the second quarter of fiscal 2023, down 8% from the year-ago adjusted figure. However, the metric surpassed the Zacks Consensus Estimate by 13.3%.
Without adjustments, GAAP EPS for the fiscal first quarter was 18 cents, down 59% from the year-ago quarter’s figure.
Net Sales
In the quarter under review, net sales totaled $244.6 million, up 5.1% from the year-ago quarter. The figure beat the Zacks Consensus Estimate by 2.6%.
Segmental Sales Break-Up
In the fiscal second quarter, Animal Health’s net sales increased 9% to $163.8 million. Within the segment, sales of medicated feed additives (MFAs) and others reflected 6% year-over-year growth. The uptick was driven by increased demand for the MFAs in Latin America and for processing aids used in the ethanol fermentation industry.
Within Animal Health, nutritional specialty product sales rose 17%, primarily banking on higher domestic demand and higher average selling prices for dairy products, along with growth in companion animal products. Also, net vaccine sales showed a year-over-year rise of 4% on increased demand.
Net sales in the Mineral Nutrition segment fell 8% year over year to $61.6 million due to a decline in demand for trace minerals.
Net sales in the Performance Products segment rose 27% to $19.2 million, driven by increased demand for copper-based products and higher average selling prices for copper-based products and ingredients for personal care products.
Margins
Phibro’s fiscal second-quarter gross profit rose 9.3% year over year to $77.4 million. The gross margin expanded 122 basis points (bps) to 31.6% on a 3.3% rise in the cost of goods sold to $167.3 million.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Selling, general and administrative expenses in the reported quarter were $61.5 million, up 27.1% from the year-ago quarter.
Operating profit declined 29.1% year over year to $15.8 million and operating margin contracted 312 bps to 6.5% in the quarter under review.
Financial Update
The company exited the fiscal second quarter with cash and short-term investments of $202 million compared with $86 million at the end of first-quarter fiscal 2023.
Cumulative net cash used in operating activities at the end of the second quarter was $13.2 million compared with $23.9 million of operating cash inflow a year ago.
Cumulative capital expenditure amounted to $33 million at the end of the second quarter of fiscal 2023 compared with $15.1 million in the year-ago quarter.
Guidance
Phibro reiterated its revenue guidance for fiscal 2023. The company expects net sales between $960 million and $1 billion for fiscal 2023. The Zacks Consensus Estimate for the metric is pegged at $976.7 million.
Adjusted EPS is expected to be in the range of $1.21 - $1.31. The Zacks Consensus Estimate for the same is pegged at $1.21.
Our Take
Phibro exited second-quarter fiscal 2023 with better-than-expected earnings and revenues. Robust performances across Animal Health and Performance Products segments are encouraging. The growing uptake of MFAs, dairy products and vaccines buoys optimism. Expansion of gross margin is encouraging too.
On the flip side, the company earnings registered a year-over-year decline. The Mineral Nutrition Products segment reported a year-over-year decline due to a decrease in demand for trace minerals. Mounting costs and contraction of operating margin are a concern.
Zacks Rank and Key Picks
Phibro currently carries Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Neogen Corporation (NEOG - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Neogen, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of 15 cents, beating the Zacks Consensus Estimate of a loss of 8 cents per share. Revenues of $230 million outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Neogen has an earnings yield of 2.5% compared with the industry’s 0.2%. NEOG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 70.11%.
McKesson, having a Zacks Rank #2, reported third-quarter 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 4.79%.
Hologic reported first-quarter 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 46.08%.
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Phibro (PAHC) Q2 Earnings Top Estimates, Gross Margin Up
Phibro Animal Health (PAHC - Free Report) delivered adjusted earnings per share (EPS) of 34 cents in the second quarter of fiscal 2023, down 8% from the year-ago adjusted figure. However, the metric surpassed the Zacks Consensus Estimate by 13.3%.
Without adjustments, GAAP EPS for the fiscal first quarter was 18 cents, down 59% from the year-ago quarter’s figure.
Net Sales
In the quarter under review, net sales totaled $244.6 million, up 5.1% from the year-ago quarter. The figure beat the Zacks Consensus Estimate by 2.6%.
Segmental Sales Break-Up
In the fiscal second quarter, Animal Health’s net sales increased 9% to $163.8 million. Within the segment, sales of medicated feed additives (MFAs) and others reflected 6% year-over-year growth. The uptick was driven by increased demand for the MFAs in Latin America and for processing aids used in the ethanol fermentation industry.
Within Animal Health, nutritional specialty product sales rose 17%, primarily banking on higher domestic demand and higher average selling prices for dairy products, along with growth in companion animal products. Also, net vaccine sales showed a year-over-year rise of 4% on increased demand.
Net sales in the Mineral Nutrition segment fell 8% year over year to $61.6 million due to a decline in demand for trace minerals.
Net sales in the Performance Products segment rose 27% to $19.2 million, driven by increased demand for copper-based products and higher average selling prices for copper-based products and ingredients for personal care products.
Margins
Phibro’s fiscal second-quarter gross profit rose 9.3% year over year to $77.4 million. The gross margin expanded 122 basis points (bps) to 31.6% on a 3.3% rise in the cost of goods sold to $167.3 million.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Phibro Animal Health Corporation price-consensus-eps-surprise-chart | Phibro Animal Health Corporation Quote
Selling, general and administrative expenses in the reported quarter were $61.5 million, up 27.1% from the year-ago quarter.
Operating profit declined 29.1% year over year to $15.8 million and operating margin contracted 312 bps to 6.5% in the quarter under review.
Financial Update
The company exited the fiscal second quarter with cash and short-term investments of $202 million compared with $86 million at the end of first-quarter fiscal 2023.
Cumulative net cash used in operating activities at the end of the second quarter was $13.2 million compared with $23.9 million of operating cash inflow a year ago.
Cumulative capital expenditure amounted to $33 million at the end of the second quarter of fiscal 2023 compared with $15.1 million in the year-ago quarter.
Guidance
Phibro reiterated its revenue guidance for fiscal 2023. The company expects net sales between $960 million and $1 billion for fiscal 2023. The Zacks Consensus Estimate for the metric is pegged at $976.7 million.
Adjusted EPS is expected to be in the range of $1.21 - $1.31. The Zacks Consensus Estimate for the same is pegged at $1.21.
Our Take
Phibro exited second-quarter fiscal 2023 with better-than-expected earnings and revenues. Robust performances across Animal Health and Performance Products segments are encouraging. The growing uptake of MFAs, dairy products and vaccines buoys optimism. Expansion of gross margin is encouraging too.
On the flip side, the company earnings registered a year-over-year decline. The Mineral Nutrition Products segment reported a year-over-year decline due to a decrease in demand for trace minerals. Mounting costs and contraction of operating margin are a concern.
Zacks Rank and Key Picks
Phibro currently carries Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Neogen Corporation (NEOG - Free Report) , McKesson Corporation (MCK - Free Report) and Hologic, Inc. (HOLX - Free Report) .
Neogen, carrying a Zacks Rank #2, reported second-quarter fiscal 2023 adjusted EPS of 15 cents, beating the Zacks Consensus Estimate of a loss of 8 cents per share. Revenues of $230 million outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Neogen has an earnings yield of 2.5% compared with the industry’s 0.2%. NEOG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 70.11%.
McKesson, having a Zacks Rank #2, reported third-quarter 2023 adjusted EPS of $6.90, which beat the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.1%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in two, the average being 4.79%.
Hologic reported first-quarter 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 46.08%.