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Henry Schein (HSIC) Q1 Earnings Top Estimates, Gross Margin Up
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Henry Schein, Inc. (HSIC - Free Report) reported earnings per share (EPS) of $1.30 in the first quarter of 2022, reflecting a 4.8% rise from the year-ago adjusted EPS. Moreover, reported EPS surpassed the Zacks Consensus Estimate by 7.4%.
Revenues in Detail
Henry Schein reported net sales of $3.18 billion in the first quarter, up 8.7% year over year. The metric beat the Zacks Consensus Estimate by 1.5%.
The year-over-year uptick included 7.7% internal growth in local currencies, 2.4% growth from acquisitions and 1.4% decline related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.41 billion in the North American market, up 13.1% year over year. Sales totaled $768 million in the international market, down 3.2% year over year.
Segment Analysis
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the first quarter, the company recorded $1.82 billion of global Dental sales, up 2.2% year over year. In local currencies, the segment’s revenues include internally-generated sales growth of 3.5%, 0.9% growth from acquisitions and 2.2% decline related to foreign currency exchange. Further, the internal growth in local currencies of 3.5% included an increase of 4.8% in North America and a rise of 1.8% internationally.
Henry Schein’s uptick in overall dental sales performance reflects a continued recovery in patient traffic compared to the pre-pandemic levels.
North America’s dental consumable merchandise’s internal sales in local currencies rose 2.6%, whereas dental equipment internal sales in local currencies rose 13.2%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 0.5% and 10.1%, respectively.
Henry Schein, Inc. Price, Consensus and EPS Surprise
Global Medical revenues rose 18.3% year over year to $1.20 billion. The segment’s revenues include an increase of 14.7% in internal local currencies and 3.8% growth from acquisitions and a 0.2% decline related to foreign currency exchange.
Revenues from global Technology and Value-added Services rose 23.4% to $179 million. This included a rise of 11.1% in internal local currency sales and 13% growth from acquisitions and a 0.7% decline related to foreign currency exchange.
Margin Trend
In the reported quarter, gross profit totaled $973 million, reflecting a 9.2% uptick year over year. Gross margin expanded 15 basis points (bps) to 30.6%.
Selling, general and administrative expenses rose 11.1% to $682 million in the quarter under review.
Overall adjusted operating profit was $291 million, reflecting a rise of 5.1% year over year. However, adjusted operating margin contracted 32 bps year over year to 9.2%.
Financial Position
The company exited the first quarter of 2022 with cash and cash equivalents of $126 million compared with $118 million at the end of the fourth quarter of 2021. Long-term debt for the company at the end of first-quarter 2022 was $773 million compared with $811 million at the end of the fourth quarter of 2021.
Cumulative net cash provided by operating activities from continuing operations till the end of the first quarter of 2022 was $93 million compared with $63 million in the year-ago period.
During the first quarter of 2022, the company did not repurchase any shares of its common stock.
2022 Guidance
Henry Schein affirmed the EPS guidance for 2022.
For 2022, Henry Schein expects GAAP EPS in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP EPS and growth of 5% to 9% compared with 2021 non-GAAP diluted EPS. The Zacks Consensus Estimate for the metric is currently pegged at $4.66.
For 2022, Henry Schein expects sales growth of nearly 5% to 8% over 2021. The Zacks Consensus Estimate for revenues is currently pegged at $13.14 billion.
Our Take
Henry Schein exited the first quarter of 2022 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. First-quarter growth in the dental business was driven by strong global equipment sales as dentists continued to invest in their practices and consumable merchandise sales. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well. Meanwhile, the rise in operating costs is building pressure on the bottom line. Foreign exchange impact persists.
Zacks Rank and Key Picks
Henry Schein currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Molina Healthcare, Inc. (MOH - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Alkermes plc (ALKS - Free Report) .
Molina Healthcare, having a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of $4.90, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $7.8 billion outpaced the consensus mark by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Molina Healthcare has an estimated long-term growth rate of 16.4%. MOH’s earnings surpassed estimates in the trailing three quarters and missed in one, the average surprise being 1.5%.
Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.
Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #2.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.
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Henry Schein (HSIC) Q1 Earnings Top Estimates, Gross Margin Up
Henry Schein, Inc. (HSIC - Free Report) reported earnings per share (EPS) of $1.30 in the first quarter of 2022, reflecting a 4.8% rise from the year-ago adjusted EPS. Moreover, reported EPS surpassed the Zacks Consensus Estimate by 7.4%.
Revenues in Detail
Henry Schein reported net sales of $3.18 billion in the first quarter, up 8.7% year over year. The metric beat the Zacks Consensus Estimate by 1.5%.
The year-over-year uptick included 7.7% internal growth in local currencies, 2.4% growth from acquisitions and 1.4% decline related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.41 billion in the North American market, up 13.1% year over year. Sales totaled $768 million in the international market, down 3.2% year over year.
Segment Analysis
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the first quarter, the company recorded $1.82 billion of global Dental sales, up 2.2% year over year. In local currencies, the segment’s revenues include internally-generated sales growth of 3.5%, 0.9% growth from acquisitions and 2.2% decline related to foreign currency exchange. Further, the internal growth in local currencies of 3.5% included an increase of 4.8% in North America and a rise of 1.8% internationally.
Henry Schein’s uptick in overall dental sales performance reflects a continued recovery in patient traffic compared to the pre-pandemic levels.
North America’s dental consumable merchandise’s internal sales in local currencies rose 2.6%, whereas dental equipment internal sales in local currencies rose 13.2%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 0.5% and 10.1%, respectively.
Henry Schein, Inc. Price, Consensus and EPS Surprise
Global Medical revenues rose 18.3% year over year to $1.20 billion. The segment’s revenues include an increase of 14.7% in internal local currencies and 3.8% growth from acquisitions and a 0.2% decline related to foreign currency exchange.
Revenues from global Technology and Value-added Services rose 23.4% to $179 million. This included a rise of 11.1% in internal local currency sales and 13% growth from acquisitions and a 0.7% decline related to foreign currency exchange.
Margin Trend
In the reported quarter, gross profit totaled $973 million, reflecting a 9.2% uptick year over year. Gross margin expanded 15 basis points (bps) to 30.6%.
Selling, general and administrative expenses rose 11.1% to $682 million in the quarter under review.
Overall adjusted operating profit was $291 million, reflecting a rise of 5.1% year over year. However, adjusted operating margin contracted 32 bps year over year to 9.2%.
Financial Position
The company exited the first quarter of 2022 with cash and cash equivalents of $126 million compared with $118 million at the end of the fourth quarter of 2021. Long-term debt for the company at the end of first-quarter 2022 was $773 million compared with $811 million at the end of the fourth quarter of 2021.
Cumulative net cash provided by operating activities from continuing operations till the end of the first quarter of 2022 was $93 million compared with $63 million in the year-ago period.
During the first quarter of 2022, the company did not repurchase any shares of its common stock.
2022 Guidance
Henry Schein affirmed the EPS guidance for 2022.
For 2022, Henry Schein expects GAAP EPS in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP EPS and growth of 5% to 9% compared with 2021 non-GAAP diluted EPS. The Zacks Consensus Estimate for the metric is currently pegged at $4.66.
For 2022, Henry Schein expects sales growth of nearly 5% to 8% over 2021. The Zacks Consensus Estimate for revenues is currently pegged at $13.14 billion.
Our Take
Henry Schein exited the first quarter of 2022 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. First-quarter growth in the dental business was driven by strong global equipment sales as dentists continued to invest in their practices and consumable merchandise sales. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well. Meanwhile, the rise in operating costs is building pressure on the bottom line. Foreign exchange impact persists.
Zacks Rank and Key Picks
Henry Schein currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Molina Healthcare, Inc. (MOH - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Alkermes plc (ALKS - Free Report) .
Molina Healthcare, having a Zacks Rank #2 (Buy), reported first-quarter 2022 adjusted EPS of $4.90, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $7.8 billion outpaced the consensus mark by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Molina Healthcare has an estimated long-term growth rate of 16.4%. MOH’s earnings surpassed estimates in the trailing three quarters and missed in one, the average surprise being 1.5%.
Medpace reported first-quarter 2022 adjusted EPS of $1.69, which surpassed the Zacks Consensus Estimate by 34.1%. Revenues of $330.9 million outpaced the Zacks Consensus Estimate by 1.1%. It currently has a Zacks Rank #2.
Medpace has a historical growth rate of 27.3%. MEDP’s earnings surpassed estimates in the trailing four quarters, the average surprise being 17.1%.
Alkermes reported first-quarter 2022 adjusted EPS of 12 cents, which surpassed the Zacks Consensus Estimate of a penny. Revenues of $278.6 million outpaced the Zacks Consensus Estimate by 6.2%. It currently sports a Zacks Rank #2.
Alkermes has an estimated long-term growth rate of 25.1%. ALKS’ earnings surpassed estimates in the trailing four quarters, the average surprise being 350.5%.