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What's in Store for Henry Schein (HSIC) in Q3 Earnings?
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Henry Schein, Inc. (HSIC - Free Report) is slated to report third-quarter 2021 results on Nov 2, before market open.
In the last reported quarter, the company’s earnings of $1.11 surpassed the Zacks Consensus Estimate by 16.8%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 28.37%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Dental Business
Per Henry Schein’s August 2021 update, the company has been witnessing strengthening demand in the global dental and medical markets on the gradual reopening of practices and stable patient traffic globally over the past few months, even in countries with more stringent lockdown rules. This recovery trend is likely to have continued through the entire third quarter, thus boosting the company’s top line.
The acquisition of majority ownership in eAssist Dental Solutions (eAssist) in June 2021 has advanced the company's mission to offer the best solutions to help dental practices operate more efficiently and profitably, freeing up practice resources to focus on patient care. We believe eAssist made a significant full-quarter contribution to Henry Schein’s third quarter revenues.
The acquisition of majority ownership in Jarvis Analytics is expected to have contributed to Henry Schein’s third-quarter revenues by strengthening Henry Schein One's goal to be the leading provider of dental analytics solutions and services to the dental market.
Further, Henry Schein, during the last quarter earnings update, noted that the company is expanding its DDX practice (a desktop and Web-based application that enables communication between dental practices and dental labs) to a lab workflow platform with integration between Ortho2 and Dentrix practice management Software that will stream Reveal Clear Aligner integration and enhance practice efficiency. This development is expected to have contributed robustly during the third quarter.
The Zacks Consensus Estimate for third-quarter global Dental business revenues is pegged at $1.86 billion, suggesting a surge of 12.9% from the year-ago quarter’s reported figure.
Medical Business
Henry Schein’s medical business is again expected to have seen demand for its Personal Protective Equipment (PPE) and COVID-related products amid the surge in the new Delta variant. The company, during its August update, reported improvement in trends in the physician, ambulatory, surgery center, alternate care, and home care markets along with growth in demand for medical-surgical equipment and laboratory product sales backed by the normalization of economy. With the overall economic situation remaining unchanged through the rest of the third quarter, we believe this recovery trend to have continued in this period, thus boosting the company’s top line.
In terms of COVID-19 test sales, Henry Schein witnessed lower COVID-19 testing demand due to massive vaccine rollout, which might have impacted the medical business in the third quarter. However, in July, with the surge in Delta variant, the company witnessed an increase in testing demand. We believe the surge in testing demand to have offset the negative impact in Medical business in the third quarter.
Over the past few months, the company has been gaining from the increased uptake of telemedicine. In this regard, Medpod and Henry Schein Medical’s (Henry Schein’s U.S. medical business) web-based clinical decision support system VisualDx has gained importance over the past few months amid the pandemic, a trend that most likely continued to contribute to third-quarter revenues.
The Zacks Consensus Estimate for third-quarter global Medical business revenues is pegged at $921 million, suggesting a decline of 10.35 from the year-ago quarter’s reported figure.
Technology and Value-Added Services Business
During the last quarter earnings update, Henry Schein witnessed growth in the adoption of Dentrix Enterprise, Dentrix Ascend, Demandforce, DentalPlans.com solutions. The company also noted that it invests in analytics and patient marketing solutions to drive practice efficiency and patient engagement. We believe these to have continued through the third quarter as well, on strong customer adoption.
Like the second quarter, the business is expected to have witnessed an uptick in internal sales on the back of Henry Schein One business as well as solid equipment sales growth. However, internationally, segmental revenues are expected to have been impacted by the slowdown in the U.K. market, thus impacting third-quarter revenues.
As of now, the Zacks Consensus Estimate for third-quarter global Technology and Valued-Added Services business revenues is pegged at $163 million, suggesting a decline of 56.6% from the year-ago quarter’s reported figure.
The Estimate Picture
For third-quarter 2021, the Zacks Consensus Estimate for total revenues of $2.94 billion implies an improvement of 3.6% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at 93 cents, indicating a decline of 9.7% from the prior-year quarter’s reported figure.
What Our Model Suggests
Our proven model predicts an earnings beat for Henry Schein this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Henry Schein has an Earnings ESP of +0.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks Worth a Look
Here are a few other stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
West Pharmaceutical Services, Inc. (WST - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Oct 28.
Insulet Corporation (PODD - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company will announce third-quarter 2021 results on Nov 4.
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What's in Store for Henry Schein (HSIC) in Q3 Earnings?
Henry Schein, Inc. (HSIC - Free Report) is slated to report third-quarter 2021 results on Nov 2, before market open.
In the last reported quarter, the company’s earnings of $1.11 surpassed the Zacks Consensus Estimate by 16.8%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 28.37%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Dental Business
Per Henry Schein’s August 2021 update, the company has been witnessing strengthening demand in the global dental and medical markets on the gradual reopening of practices and stable patient traffic globally over the past few months, even in countries with more stringent lockdown rules. This recovery trend is likely to have continued through the entire third quarter, thus boosting the company’s top line.
The acquisition of majority ownership in eAssist Dental Solutions (eAssist) in June 2021 has advanced the company's mission to offer the best solutions to help dental practices operate more efficiently and profitably, freeing up practice resources to focus on patient care. We believe eAssist made a significant full-quarter contribution to Henry Schein’s third quarter revenues.
The acquisition of majority ownership in Jarvis Analytics is expected to have contributed to Henry Schein’s third-quarter revenues by strengthening Henry Schein One's goal to be the leading provider of dental analytics solutions and services to the dental market.
Further, Henry Schein, during the last quarter earnings update, noted that the company is expanding its DDX practice (a desktop and Web-based application that enables communication between dental practices and dental labs) to a lab workflow platform with integration between Ortho2 and Dentrix practice management Software that will stream Reveal Clear Aligner integration and enhance practice efficiency. This development is expected to have contributed robustly during the third quarter.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
The Zacks Consensus Estimate for third-quarter global Dental business revenues is pegged at $1.86 billion, suggesting a surge of 12.9% from the year-ago quarter’s reported figure.
Medical Business
Henry Schein’s medical business is again expected to have seen demand for its Personal Protective Equipment (PPE) and COVID-related products amid the surge in the new Delta variant. The company, during its August update, reported improvement in trends in the physician, ambulatory, surgery center, alternate care, and home care markets along with growth in demand for medical-surgical equipment and laboratory product sales backed by the normalization of economy. With the overall economic situation remaining unchanged through the rest of the third quarter, we believe this recovery trend to have continued in this period, thus boosting the company’s top line.
In terms of COVID-19 test sales, Henry Schein witnessed lower COVID-19 testing demand due to massive vaccine rollout, which might have impacted the medical business in the third quarter. However, in July, with the surge in Delta variant, the company witnessed an increase in testing demand. We believe the surge in testing demand to have offset the negative impact in Medical business in the third quarter.
Over the past few months, the company has been gaining from the increased uptake of telemedicine. In this regard, Medpod and Henry Schein Medical’s (Henry Schein’s U.S. medical business) web-based clinical decision support system VisualDx has gained importance over the past few months amid the pandemic, a trend that most likely continued to contribute to third-quarter revenues.
The Zacks Consensus Estimate for third-quarter global Medical business revenues is pegged at $921 million, suggesting a decline of 10.35 from the year-ago quarter’s reported figure.
Technology and Value-Added Services Business
During the last quarter earnings update, Henry Schein witnessed growth in the adoption of Dentrix Enterprise, Dentrix Ascend, Demandforce, DentalPlans.com solutions. The company also noted that it invests in analytics and patient marketing solutions to drive practice efficiency and patient engagement. We believe these to have continued through the third quarter as well, on strong customer adoption.
Like the second quarter, the business is expected to have witnessed an uptick in internal sales on the back of Henry Schein One business as well as solid equipment sales growth. However, internationally, segmental revenues are expected to have been impacted by the slowdown in the U.K. market, thus impacting third-quarter revenues.
As of now, the Zacks Consensus Estimate for third-quarter global Technology and Valued-Added Services business revenues is pegged at $163 million, suggesting a decline of 56.6% from the year-ago quarter’s reported figure.
The Estimate Picture
For third-quarter 2021, the Zacks Consensus Estimate for total revenues of $2.94 billion implies an improvement of 3.6% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at 93 cents, indicating a decline of 9.7% from the prior-year quarter’s reported figure.
What Our Model Suggests
Our proven model predicts an earnings beat for Henry Schein this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Earnings ESP: Henry Schein has an Earnings ESP of +0.31%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks Worth a Look
Here are a few other stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Becton, Dickinson and Company (BDX - Free Report) has an Earnings ESP of +2.62% and a Zacks Rank of 2. The company will release fourth-quarter fiscal 2021 results on Nov 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical Services, Inc. (WST - Free Report) has an Earnings ESP of +1.93% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Oct 28.
Insulet Corporation (PODD - Free Report) has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company will announce third-quarter 2021 results on Nov 4.