We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Henry Schein (HSIC) Q3 Earnings: Disappointment in Store?
Read MoreHide Full Article
Henry Schein, Inc. (HSIC - Free Report) is scheduled to report third-quarter 2016 financial numbers on Nov 2, before the opening bell.
Last quarter, this renowned healthcare products and service distributor posted a positive earnings surprise of 1.23%. Encouragingly, Henry Schein’s earnings surpassed the Zacks Consensus Estimate in the past four quarters, at an average of 2.51%.
Let’s see how things are shaping up prior to this announcement.
On a disappointing note, Henry Schein reported lower-than-expected dental sales in North America in the last-reported quarter. Dental sales in North America were impacted by the decision to halt the sale of certain precious metal products that offered a low gross margin. Additionally, the company has also been registering high restructuring costs. Management expects Henry Schein to record similarly high restructuring costs in the third quarter of 2016 as well. Moreover, headwinds in the form of increased competition in the medical product distribution market as well as market uncertainties continue to raise concerns.
However, the Medical, Animal Health and Technology and Value-Added Services businesses demonstrated a strong performance. We expect these businesses to continue to contribute to the top line in the yet-to-be-reported quarter.
Further, management is highly optimistic about the company’s ability to win new customers in the medical space. The company has effectively capitalized on the growing medical market whose benefits would be reflected in the coming quarters.
The company’s core software products and upgrades at Technology and Value-Added Services businesses aim to provide customers with efficient and easy-to-use solutions. This has helped the company generate more business, manage content among multiple sites and improve the overall management.
Meanwhile, Henry Schein’s commitment to offer enhanced services in the U.K. and European Union remains unchanged despite Brexit. Both the regions are believed to represent long-term opportunities in the Dental, Animal Health and Medical space. The strategy to enter Poland’s dental market through the 80% acquisition of Poland’s dental distributor Marrodent is a major positive as the country has approximately 26,000 practicing dentists and roughly 20,000 dental offices.
Earnings Whispers
Our proven model does not conclusively show that Henry Schein is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Henry Schein has an Earnings ESP of -0.61%. That is because the Most Accurate estimate is $1.64 while the Zacks Consensus Estimate is pegged at $1.65.
Zacks Rank: Henry Schein has a Zacks Rank #4. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Glaukos Corporation (GKOS - Free Report) has an earnings ESP of +200% and a Zacks Rank #1.
Invuity, Inc. has an earnings ESP of +1.61% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Henry Schein (HSIC) Q3 Earnings: Disappointment in Store?
Henry Schein, Inc. (HSIC - Free Report) is scheduled to report third-quarter 2016 financial numbers on Nov 2, before the opening bell.
Last quarter, this renowned healthcare products and service distributor posted a positive earnings surprise of 1.23%. Encouragingly, Henry Schein’s earnings surpassed the Zacks Consensus Estimate in the past four quarters, at an average of 2.51%.
Let’s see how things are shaping up prior to this announcement.
HENRY SCHEIN IN Price and EPS Surprise
HENRY SCHEIN IN Price and EPS Surprise | HENRY SCHEIN IN Quote
Factors at Play
On a disappointing note, Henry Schein reported lower-than-expected dental sales in North America in the last-reported quarter. Dental sales in North America were impacted by the decision to halt the sale of certain precious metal products that offered a low gross margin. Additionally, the company has also been registering high restructuring costs. Management expects Henry Schein to record similarly high restructuring costs in the third quarter of 2016 as well. Moreover, headwinds in the form of increased competition in the medical product distribution market as well as market uncertainties continue to raise concerns.
However, the Medical, Animal Health and Technology and Value-Added Services businesses demonstrated a strong performance. We expect these businesses to continue to contribute to the top line in the yet-to-be-reported quarter.
Further, management is highly optimistic about the company’s ability to win new customers in the medical space. The company has effectively capitalized on the growing medical market whose benefits would be reflected in the coming quarters.
The company’s core software products and upgrades at Technology and Value-Added Services businesses aim to provide customers with efficient and easy-to-use solutions. This has helped the company generate more business, manage content among multiple sites and improve the overall management.
Meanwhile, Henry Schein’s commitment to offer enhanced services in the U.K. and European Union remains unchanged despite Brexit. Both the regions are believed to represent long-term opportunities in the Dental, Animal Health and Medical space. The strategy to enter Poland’s dental market through the 80% acquisition of Poland’s dental distributor Marrodent is a major positive as the country has approximately 26,000 practicing dentists and roughly 20,000 dental offices.
Earnings Whispers
Our proven model does not conclusively show that Henry Schein is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Henry Schein has an Earnings ESP of -0.61%. That is because the Most Accurate estimate is $1.64 while the Zacks Consensus Estimate is pegged at $1.65.
Zacks Rank: Henry Schein has a Zacks Rank #4. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Glaukos Corporation (GKOS - Free Report) has an earnings ESP of +200% and a Zacks Rank #1.
Penumbra, Inc. (PEN - Free Report) has an earnings ESP of +45.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Invuity, Inc. has an earnings ESP of +1.61% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>