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Phibro (PAHC) Q3 Earnings Miss Estimates, Gross Margin Up
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Phibro Animal Health (PAHC - Free Report) delivered adjusted earnings per share (EPS) of 29 cents in the third quarter of fiscal 2023, down 12.1% from the year-ago quarter’s adjusted figure. The metric also missed the Zacks Consensus Estimate by 12.2%.
Without adjustments, GAAP EPS in the fiscal third quarter were 25 cents, down 43% from the year-ago quarter’s figure.
Net Sales
In the quarter under review, net sales totaled $245.7 million, up 2.5% from the year-ago quarter’. The figure beat the Zacks Consensus Estimate by 0.2%.
Segmental Sales Break-Up
In the fiscal third quarter, Animal Health’s net sales increased 11% to $164.4 million. Within the segment, sales of medicated feed additives (MFAs) and others reflected an 11% year-over-year growth. The uptick was driven by increased demand for the MFAs, primarily in the United States, Latin America and Canada for processing aids used in the ethanol fermentation industry.
Within Animal Health, nutritional specialty product sales rose 9%, primarily on higher domestic demand and higher average selling prices for dairy products and growth in the companion animal product. Also, net vaccine sales showed a year-over-year rise of 15% on increased demand.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Net sales in the Mineral Nutrition segment fell 9% year over year to $62.9 million due to a decline in the demand for trace minerals.
Net sales in the Performance Products segment fell 17% to $18.3 million, due to decreased demand for copper-based products and higher average selling prices for copper-based products and ingredients for personal care products.
Margins
Phibro’s fiscal third-quarter gross profit rose 5.6% year over year to $75.6 million. The gross margin expanded 89 basis points (bps) to 30.8% on a 1.3% rise in the cost of goods sold to $170.1 million
Selling, general and administrative expenses in the reported quarter were $57 million, up 8.8% from the year-ago quarter’s levels.
Operating profit declined 3.1% year over year to $18.6 million and operating margin contracted 44 bps to 7.6% in the quarter under review.
Financial Update
The company exited the fiscal third quarter with cash and short-term investments of $192 million compared with $202 million at the end of second-quarter fiscal 2023.
Cumulative net cash used in operating activities at the end of the third quarter was $6.9 million compared with $30.1 million of operating cash inflow a year ago.
Cumulative capital expenditure amounted to $40.9 million at the end of the third quarter of fiscal 2023 compared with $25.2 million in the year-ago quarter.
Guidance
Phibro reiterated its revenue guidance for fiscal 2023. The company expects net sales between $960 million and $1 billion for fiscal 2023. The Zacks Consensus Estimate for the metric is pegged at $983.6 million.
Adjusted EPS is expected in the range of $1.21-$1.31. The Zacks Consensus Estimate for the same is pegged at $1.25.
Our Take
Phibro exited third-quarter fiscal 2023 on a mixed note with better-than-expected revenues and earnings miss. However, robust performances across Animal Health segment is encouraging. The increased demand for the MFAs, primarily in the United States, Latin America and Canada for processing aids used in the ethanol fermentation industry buoys optimism. Expansion of gross margin is encouraging too.
The company’s earnings registered a year-over-year decline. The Mineral Nutrition Products segment reported a year-over-year decline due to a decline in the demand for trace minerals. Lower demand for copper-based products is also discouraging. Mounting costs and the contraction of operating margin are a concern.
Zacks Rank and Key Picks
Phibro currently carries Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted earnings per share (EPS) of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.
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Phibro (PAHC) Q3 Earnings Miss Estimates, Gross Margin Up
Phibro Animal Health (PAHC - Free Report) delivered adjusted earnings per share (EPS) of 29 cents in the third quarter of fiscal 2023, down 12.1% from the year-ago quarter’s adjusted figure. The metric also missed the Zacks Consensus Estimate by 12.2%.
Without adjustments, GAAP EPS in the fiscal third quarter were 25 cents, down 43% from the year-ago quarter’s figure.
Net Sales
In the quarter under review, net sales totaled $245.7 million, up 2.5% from the year-ago quarter’. The figure beat the Zacks Consensus Estimate by 0.2%.
Segmental Sales Break-Up
In the fiscal third quarter, Animal Health’s net sales increased 11% to $164.4 million. Within the segment, sales of medicated feed additives (MFAs) and others reflected an 11% year-over-year growth. The uptick was driven by increased demand for the MFAs, primarily in the United States, Latin America and Canada for processing aids used in the ethanol fermentation industry.
Within Animal Health, nutritional specialty product sales rose 9%, primarily on higher domestic demand and higher average selling prices for dairy products and growth in the companion animal product. Also, net vaccine sales showed a year-over-year rise of 15% on increased demand.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Phibro Animal Health Corporation price-consensus-eps-surprise-chart | Phibro Animal Health Corporation Quote
Net sales in the Mineral Nutrition segment fell 9% year over year to $62.9 million due to a decline in the demand for trace minerals.
Net sales in the Performance Products segment fell 17% to $18.3 million, due to decreased demand for copper-based products and higher average selling prices for copper-based products and ingredients for personal care products.
Margins
Phibro’s fiscal third-quarter gross profit rose 5.6% year over year to $75.6 million. The gross margin expanded 89 basis points (bps) to 30.8% on a 1.3% rise in the cost of goods sold to $170.1 million
Selling, general and administrative expenses in the reported quarter were $57 million, up 8.8% from the year-ago quarter’s levels.
Operating profit declined 3.1% year over year to $18.6 million and operating margin contracted 44 bps to 7.6% in the quarter under review.
Financial Update
The company exited the fiscal third quarter with cash and short-term investments of $192 million compared with $202 million at the end of second-quarter fiscal 2023.
Cumulative net cash used in operating activities at the end of the third quarter was $6.9 million compared with $30.1 million of operating cash inflow a year ago.
Cumulative capital expenditure amounted to $40.9 million at the end of the third quarter of fiscal 2023 compared with $25.2 million in the year-ago quarter.
Guidance
Phibro reiterated its revenue guidance for fiscal 2023. The company expects net sales between $960 million and $1 billion for fiscal 2023. The Zacks Consensus Estimate for the metric is pegged at $983.6 million.
Adjusted EPS is expected in the range of $1.21-$1.31. The Zacks Consensus Estimate for the same is pegged at $1.25.
Our Take
Phibro exited third-quarter fiscal 2023 on a mixed note with better-than-expected revenues and earnings miss. However, robust performances across Animal Health segment is encouraging. The increased demand for the MFAs, primarily in the United States, Latin America and Canada for processing aids used in the ethanol fermentation industry buoys optimism. Expansion of gross margin is encouraging too.
The company’s earnings registered a year-over-year decline. The Mineral Nutrition Products segment reported a year-over-year decline due to a decline in the demand for trace minerals. Lower demand for copper-based products is also discouraging. Mounting costs and the contraction of operating margin are a concern.
Zacks Rank and Key Picks
Phibro currently carries Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation (EW - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted earnings per share (EPS) of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and broke even in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.