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Phibro (PAHC) Sales Impacted by Macro Concerns, FX Headwind
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Phibro Animal Health’s (PAHC - Free Report) business continues to be adversely affected by unforeseen macroeconomic circumstances. Heightened competition, including those from generics, also remains a concern. The stock currently carries a Zacks Rank #4 (Sell).
The COVID-19 pandemic has adversely affected the international economic conditions and financial markets, leading to an economic downturn in many countries, in which Phibro operates.
In the current scenario, the company’s business is impacted by broader military conflicts resulting from the ongoing armed conflict between Russia and Ukraine. Other impacts include supply chain and logistics disruptions, macroeconomic impacts from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, as well as heightened cybersecurity threats. Additionally, a pandemic or any other similar health crisis could have economic impacts on the company’s customers, suppliers and markets.
In the fourth quarter of fiscal 2023, Phibro’s gross profit fell 2.4% year over year. On a non-GAAP basis, diluted earnings per share for the full fiscal year 2023 declined 8%, driven by higher SG&A expenses, interest and income taxes. Going by our estimate, the company’s adjusted cost of goods sold is expected to increase 3.8% in fiscal 2024.
Further, Phibro conducts operations globally, which entails transactions in a variety of currencies. In fiscal 2023, the company generated approximately 40% of its revenues from operations outside the United States.
Notably, Phibro manufactures some of its major products in Brazil and Israel, where production costs are largely denominated in local currencies while selling prices are largely set in U.S. dollars. As such, the company is exposed to changes in the cost of goods sold resulting from currency movements and may not be able to adjust its selling prices to offset such movements. In fact, management believes that the currently strong U.S. dollar is affecting the company’s export market.
On a positive note, Phibro’s key animal health products, including MFAs (Medicated Feed Additives) and nutritional specialty products facilitate in enhancing animal nutrition. Phibro’s leading product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry and swine. Similarly, the company’s nutritional product offerings, such as OmniGen-AF, are used increasingly in the global dairy industry.
The company also manufactures vaccines, which protect animals from both viral and bacterial disease challenges. On the other hand, Phibro’s mineral nutrition products strengthen an animal’s diet and help maintain its optimal health. During the fourth quarter of fiscal 2023, it registered a 2% increase in MFAs and others, driven by the growing demand for processing aids used in the ethanol fermentation industry.
In terms of the vaccine product line, the business growth is driven by new registrations, which, according to Phibro, will open new markets for the products. The company recently completed construction of a new vaccine production facility in Guarulhos, Brazil and received regulatory approval to manufacture and market autogenous vaccines that combat disease in swine, poultry and aquaculture. Vaccine sales reported a 25% improvement in the fiscal fourth quarter, backed by increased demand and new product launches in Latin America. For fiscal 2024, our model estimates a 3.4% sales improvement in this product line.
Over the past year, shares of Phibro have declined 10.7% compared with the industry’s 2% drop.
Haemonetics’ stock has gained 17.5% in the past year. Earnings estimates for Haemonetics have increased from $3.56 to $3.74 in 2023 and $3.96 to $4.07 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.39%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for Quanterix’s 2023 loss per share have narrowed from $1.19 to 97 cents in the past 30 days. Shares of the company have gained 173.7% in the past year against the industry’s decline of 5.3%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for SiBone’s 2023 loss have narrowed from $1.42 to $1.27 per share in the past 30 days. Shares of the company have gained 22.8% in the past year compared with the industry’s rise of 1%.
SIBN’s earnings beat estimates in all the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBone delivered an earnings surprise of 26.83%.
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Phibro (PAHC) Sales Impacted by Macro Concerns, FX Headwind
Phibro Animal Health’s (PAHC - Free Report) business continues to be adversely affected by unforeseen macroeconomic circumstances. Heightened competition, including those from generics, also remains a concern. The stock currently carries a Zacks Rank #4 (Sell).
The COVID-19 pandemic has adversely affected the international economic conditions and financial markets, leading to an economic downturn in many countries, in which Phibro operates.
In the current scenario, the company’s business is impacted by broader military conflicts resulting from the ongoing armed conflict between Russia and Ukraine. Other impacts include supply chain and logistics disruptions, macroeconomic impacts from the exclusion of Russian financial institutions from the global banking system, volatility in foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, as well as heightened cybersecurity threats. Additionally, a pandemic or any other similar health crisis could have economic impacts on the company’s customers, suppliers and markets.
In the fourth quarter of fiscal 2023, Phibro’s gross profit fell 2.4% year over year. On a non-GAAP basis, diluted earnings per share for the full fiscal year 2023 declined 8%, driven by higher SG&A expenses, interest and income taxes. Going by our estimate, the company’s adjusted cost of goods sold is expected to increase 3.8% in fiscal 2024.
Further, Phibro conducts operations globally, which entails transactions in a variety of currencies. In fiscal 2023, the company generated approximately 40% of its revenues from operations outside the United States.
Phibro Animal Health Corporation Price
Phibro Animal Health Corporation price | Phibro Animal Health Corporation Quote
Notably, Phibro manufactures some of its major products in Brazil and Israel, where production costs are largely denominated in local currencies while selling prices are largely set in U.S. dollars. As such, the company is exposed to changes in the cost of goods sold resulting from currency movements and may not be able to adjust its selling prices to offset such movements. In fact, management believes that the currently strong U.S. dollar is affecting the company’s export market.
On a positive note, Phibro’s key animal health products, including MFAs (Medicated Feed Additives) and nutritional specialty products facilitate in enhancing animal nutrition. Phibro’s leading product franchise, Stafac/V-Max/Eskalin, is approved in more than 30 countries for use in poultry and swine. Similarly, the company’s nutritional product offerings, such as OmniGen-AF, are used increasingly in the global dairy industry.
The company also manufactures vaccines, which protect animals from both viral and bacterial disease challenges. On the other hand, Phibro’s mineral nutrition products strengthen an animal’s diet and help maintain its optimal health. During the fourth quarter of fiscal 2023, it registered a 2% increase in MFAs and others, driven by the growing demand for processing aids used in the ethanol fermentation industry.
In terms of the vaccine product line, the business growth is driven by new registrations, which, according to Phibro, will open new markets for the products. The company recently completed construction of a new vaccine production facility in Guarulhos, Brazil and received regulatory approval to manufacture and market autogenous vaccines that combat disease in swine, poultry and aquaculture. Vaccine sales reported a 25% improvement in the fiscal fourth quarter, backed by increased demand and new product launches in Latin America. For fiscal 2024, our model estimates a 3.4% sales improvement in this product line.
Over the past year, shares of Phibro have declined 10.7% compared with the industry’s 2% drop.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Quanterix (QTRX - Free Report) and SiBone (SIBN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Haemonetics’ stock has gained 17.5% in the past year. Earnings estimates for Haemonetics have increased from $3.56 to $3.74 in 2023 and $3.96 to $4.07 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.39%. In the last reported quarter, it posted an earnings surprise of 38.16%.
Estimates for Quanterix’s 2023 loss per share have narrowed from $1.19 to 97 cents in the past 30 days. Shares of the company have gained 173.7% in the past year against the industry’s decline of 5.3%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for SiBone’s 2023 loss have narrowed from $1.42 to $1.27 per share in the past 30 days. Shares of the company have gained 22.8% in the past year compared with the industry’s rise of 1%.
SIBN’s earnings beat estimates in all the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBone delivered an earnings surprise of 26.83%.