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) Q4 Earnings Top Estimates, Margins Dip
Read MoreHide Full Article
Henry Schein, Inc. (HSIC - Free Report) reported adjusted earnings per share (“EPS”) of $1.00 from continuing operations for the fourth quarter of 2020, reflecting an improvement of 3.1% from the year-ago EPS of 97 cents. Moreover, adjusted EPS surpassed the Zacks Consensus Estimate by 4.2%. The quarter’s adjustments exclude the impact of certain restructuring charges.
GAAP EPS in the fourth quarter was 99 cents, down by 56% from the year-ago EPS of $2.25.
The year-over-year earnings were primarily driven by a strong rebound in sales along with strength in demand for personal protective equipment (“PPE”) and COVID-19-related products.
Full-year adjusted EPS was $2.97, reflecting a 15.4% decrease from the year-ago period. However, the metric surpassed the Zacks Consensus Estimate marginally by 1%.
Full-year GAAP EPS was $2.81, reflecting a plunge of 40.1% from the year-ago period.
Revenues in Detail
Henry Schein reported net sales of $3.17 billion in the fourth quarter, up 18.6% year over year. The metric beat the Zacks Consensus Estimate by 10.7%.
The year-over-year uptick resulted from strong business recovery and included 17.1% internal growth in local currencies, 0.3% growth from acquisitions and 1.2% growth related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.32 billion in the North American market, up 18.9% year over year. Sales totaled $850.6 million in the international market, up 18% year over year.
Full-year revenues were $10.12 billion, reflecting a 1.3% uptick from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 3.2%.
Henry Schein, Inc. Price, Consensus and EPS Surprise
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the fourth quarter, the company derived $1.85 billion of global Dental sales, up 7.2% year over year. The segment’s revenues include internally generated sales growth of 5.1%, 0.4% growth from acquisitions and 1.7% growth related to foreign currency exchange. Further, the internal growth in local currencies of 5.1% included a fall of 0.7% in North America and an increase of 14.2% internationally.
North America’s dental consumable merchandise’s internal sales in local currencies rose 5.3% whereas dental equipment internal sales in local currencies fell by 13.2%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 16.7% and 6.8%, respectively.
Global Medical revenues surged 48.5% year over year to $1.17 billion. The segment’s revenues include internally generated sales growth of 48.2% and 0.3% growth related to foreign currency exchange. Acquisition growth in this segment for the quarter was absent.
The business registered strong demand for PPE and COVID-19-related products (especially for COVID-19 test sales) in the quarter under review.
Revenues from global Technology and Value-added Services inched up 1.2% to $138.7 million. This included a fall of 0.7% in internal local currency sales, which was offset by 1.2% growth from acquisitions and 0.7% growth related to foreign currency exchange.
The marginally lower revenues in the company’s Technology and Value-Added Services resulted from lower transactional revenues associated with a lower number of patient visits unlike the pre-COVID-19 practice volume. Additionally, lower dental equipment sales volume in North America impacted the company’s hardware revenues.
Margin Trend
In the reported quarter, gross profit totaled $859.7 million, a 6.1% uptick year over year. Despite that, gross margin contracted 321 basis points (bps) to 27.2%.
Selling, general and administrative expenses rose 9.6% to $674.1 million in the quarter under review.
Overall adjusted operating profit was $185.6 million, down 4.9% year over year. Adjusted operating margin contracted 145 bps year over year to 5.9%.
Financial Position
The company exited 2020 with cash and cash equivalents of $421.2 million compared with $106.1 million at the end of 2019. Long-term debt for the company at the end of 2020 was $515.8 million compared with $622.9 million at the end of 2019.
Cumulative net cash provided by operating activities from continuing operations at the end of 2020 was $593.5 million compared with net cash provided by operating activities from continuing operations of $820.5 million in the year-ago period.
2021 Guidance
Henry Schein has issued the guidance for 2021’s adjusted EPS from continuing operations, which is expected to be at or above the 2019 comparable figure of $3.51. The Zacks Consensus Estimate for the same is currently pegged at $3.65.
Our Take
Henry Schein exited the fourth quarter of 2020 with better-than-expected results despite adversities posed by the coronavirus outbreak. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. The company witnessed strong demand for PPE and COVID-19-related products along with a strong rebound in sales. Strength in the company’s Dentrix Ascend cloud-based software and North America financial services sales also look impressive.
Meanwhile, contraction of both margins is deterring. The company’s inability to provide a detailed financial guidance raises apprehensions.
Zacks Rank and Key Picks
Henry Schein currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently carries a Zacks Rank #2.
IDEXX reported fourth-quarter 2020 adjusted EPS of $2.01 which surpassed the Zacks Consensus Estimate by 40.6%. Revenues of $720.9 million beat the consensus mark by 5.8%. The company currently carries a Zacks Rank #2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
Henry Schein (HSIC) Q4 Earnings Top Estimates, Margins Dip
Henry Schein, Inc. (HSIC - Free Report) reported adjusted earnings per share (“EPS”) of $1.00 from continuing operations for the fourth quarter of 2020, reflecting an improvement of 3.1% from the year-ago EPS of 97 cents. Moreover, adjusted EPS surpassed the Zacks Consensus Estimate by 4.2%. The quarter’s adjustments exclude the impact of certain restructuring charges.
GAAP EPS in the fourth quarter was 99 cents, down by 56% from the year-ago EPS of $2.25.
The year-over-year earnings were primarily driven by a strong rebound in sales along with strength in demand for personal protective equipment (“PPE”) and COVID-19-related products.
Full-year adjusted EPS was $2.97, reflecting a 15.4% decrease from the year-ago period. However, the metric surpassed the Zacks Consensus Estimate marginally by 1%.
Full-year GAAP EPS was $2.81, reflecting a plunge of 40.1% from the year-ago period.
Revenues in Detail
Henry Schein reported net sales of $3.17 billion in the fourth quarter, up 18.6% year over year. The metric beat the Zacks Consensus Estimate by 10.7%.
The year-over-year uptick resulted from strong business recovery and included 17.1% internal growth in local currencies, 0.3% growth from acquisitions and 1.2% growth related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.32 billion in the North American market, up 18.9% year over year. Sales totaled $850.6 million in the international market, up 18% year over year.
Full-year revenues were $10.12 billion, reflecting a 1.3% uptick from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 3.2%.
Henry Schein, Inc. Price, Consensus and EPS Surprise
Henry Schein, Inc. price-consensus-eps-surprise-chart | Henry Schein, Inc. Quote
Segment Analysis
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the fourth quarter, the company derived $1.85 billion of global Dental sales, up 7.2% year over year. The segment’s revenues include internally generated sales growth of 5.1%, 0.4% growth from acquisitions and 1.7% growth related to foreign currency exchange. Further, the internal growth in local currencies of 5.1% included a fall of 0.7% in North America and an increase of 14.2% internationally.
North America’s dental consumable merchandise’s internal sales in local currencies rose 5.3% whereas dental equipment internal sales in local currencies fell by 13.2%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 16.7% and 6.8%, respectively.
Global Medical revenues surged 48.5% year over year to $1.17 billion. The segment’s revenues include internally generated sales growth of 48.2% and 0.3% growth related to foreign currency exchange. Acquisition growth in this segment for the quarter was absent.
The business registered strong demand for PPE and COVID-19-related products (especially for COVID-19 test sales) in the quarter under review.
Revenues from global Technology and Value-added Services inched up 1.2% to $138.7 million. This included a fall of 0.7% in internal local currency sales, which was offset by 1.2% growth from acquisitions and 0.7% growth related to foreign currency exchange.
The marginally lower revenues in the company’s Technology and Value-Added Services resulted from lower transactional revenues associated with a lower number of patient visits unlike the pre-COVID-19 practice volume. Additionally, lower dental equipment sales volume in North America impacted the company’s hardware revenues.
Margin Trend
In the reported quarter, gross profit totaled $859.7 million, a 6.1% uptick year over year. Despite that, gross margin contracted 321 basis points (bps) to 27.2%.
Selling, general and administrative expenses rose 9.6% to $674.1 million in the quarter under review.
Overall adjusted operating profit was $185.6 million, down 4.9% year over year. Adjusted operating margin contracted 145 bps year over year to 5.9%.
Financial Position
The company exited 2020 with cash and cash equivalents of $421.2 million compared with $106.1 million at the end of 2019. Long-term debt for the company at the end of 2020 was $515.8 million compared with $622.9 million at the end of 2019.
Cumulative net cash provided by operating activities from continuing operations at the end of 2020 was $593.5 million compared with net cash provided by operating activities from continuing operations of $820.5 million in the year-ago period.
2021 Guidance
Henry Schein has issued the guidance for 2021’s adjusted EPS from continuing operations, which is expected to be at or above the 2019 comparable figure of $3.51. The Zacks Consensus Estimate for the same is currently pegged at $3.65.
Our Take
Henry Schein exited the fourth quarter of 2020 with better-than-expected results despite adversities posed by the coronavirus outbreak. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. The company witnessed strong demand for PPE and COVID-19-related products along with a strong rebound in sales. Strength in the company’s Dentrix Ascend cloud-based software and North America financial services sales also look impressive.
Meanwhile, contraction of both margins is deterring. The company’s inability to provide a detailed financial guidance raises apprehensions.
Zacks Rank and Key Picks
Henry Schein currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Hologic, Inc. (HOLX - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .
Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, beating the Zacks Consensus Estimate by 33.6%. The company currently carries a Zacks Rank #2.
IDEXX reported fourth-quarter 2020 adjusted EPS of $2.01 which surpassed the Zacks Consensus Estimate by 40.6%. Revenues of $720.9 million beat the consensus mark by 5.8%. The company currently carries a Zacks Rank #2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>