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Why Is Henry Schein (HSIC) Down 2.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Henry Schein (HSIC - Free Report) . Shares have lost about 2.5% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Henry Schein due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Henry Schein Q1 Earnings Top Estimates, Gross Margin Up
Henry Schein reported earnings per share of $1.30 in the first quarter of 2022, reflecting a 4.8% rise from the year-ago adjusted EPS. Moreover, reported earnings per share 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.
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 earnings per share guidance for 2022.
For 2022, Henry Schein expects GAAP earnings per share in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP earnings per share and growth of 5% to 9% compared with 2021 non-GAAP diluted earnings per share. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Henry Schein has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Henry Schein has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Henry Schein (HSIC) Down 2.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Henry Schein (HSIC - Free Report) . Shares have lost about 2.5% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Henry Schein due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Henry Schein Q1 Earnings Top Estimates, Gross Margin Up
Henry Schein reported earnings per share of $1.30 in the first quarter of 2022, reflecting a 4.8% rise from the year-ago adjusted EPS. Moreover, reported earnings per share 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.
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 earnings per share guidance for 2022.
For 2022, Henry Schein expects GAAP earnings per share in the range of $4.75 to $4.91, suggesting 7-10% growth over 2021 GAAP earnings per share and growth of 5% to 9% compared with 2021 non-GAAP diluted earnings per share. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Henry Schein has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Henry Schein has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.