Henry Schein, Inc. (HSIC - Free Report) is scheduled to report second-quarter 2019 results on Aug 6, before the market opens. In the last reported quarter, the company’s earnings exceeded the Zacks Consensus Estimate by 5.3%. Overall, the metric surpassed estimates in three of the trailing four quarters, the average positive surprise being 2.5%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
In the second quarter, Henry Schein is expected to demonstrate solid growth across all its segments, namely Dental, Medical and Technology plus Value-Added Services. Geographically, the company is gaining traction from all regions. We expect this trend to get reflected in the impending quarterly results.
Favorable Dental Business Trend: The company is currently making concerted efforts to expand in the field of digital dentistry, globally. In this regard, it is benefitting from the ongoing phase of digitalization in the international dental market. According to Henry Schein, over the last few quarters, end market is generally stable in the International Dental consumable market and the company is gradually gaining share in this space. On the dental equipment side too, the market is stable leading to market share gains. These trends should continue through the second quarter as well.
Notably, the company earlier stated that in March, it participated at the International Dental Show in Germany. The international dental equipment internal sales in local currency declined during the first quarter largely due to this event as dentists in Germany and the surrounding countries restrained themselves from equipment purchases until after attending the show. This typically leads to a possible rebound in sales in the second quarter.
Evidently, the Zacks Consensus Estimate for second-quarter North American dental revenues is pegged at $1.01 billion, suggesting a 9.2% rise from the sequentially reported figure. The consensus estimate for second-quarter international Dental revenues stands at $711 million, implying 14.1% growth from the prior-year reported number.
Strong Technology and Value-Added Services Business: Henry Schein is steadily progressing with the array of product launches within this business. The company’s second-quarter performance is expected to benefit from the contribution of its joint venture (JV) with Internet Brands on dental technology that resulted in the formation of Henry Schein One. In recent times, Henry Schein One rolled out several key platform updates for patient engagement, patient financing and clinical decision support solutions. The unveiling of OmniCore, an all-in-one network infrastructure solution, is also projected to aid the company’s top line in the quarter under review.
Further, all major imaging vendors have now signed agreementswith the company’s Dentrix Smart image integration solution. This apart, the company’s cloud-based dental practice management system, Dentrix Ascend, is deepening its focus on improving the practice and patient experience with additional multiple enhancements to upscale business outcomes. This development should also favor the company’s top-line growth in the second quarter of 2019.
Growing Medical Business: Henry Schein is consistently working to boost its Medical segment. We expect to see another quarter of a strong organic uptick from the existing customer base and new patient traffic. The recent acquisition of North American Rescue, a leading provider of mission-critical medical products for the defense and Public Safety markets, is also anticipated to expand the Medical portfolio in the to-be-reported quarter.
What the Model Suggests
The proven Zacks model clearly shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has higher chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Henry Schein has a Zacks Rank #2 and an Earnings ESP of +2.41%, a perfect combination that increases the odds of a positive surprise this earnings season.
The Zacks Consensus Estimate for earnings of 83 cents, however, indicates a 20.2% decline from the year-earlier reported tally.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering as these too have the right mix of elements to exceed expectations this reporting cycle.
Bio-Techne Corporation (TECH - Free Report) has an Earnings ESP of +1.27% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
Anavex Life Sciences Corp. (AVXL - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank of 2.
Allena Pharmaceuticals, Inc. (ALNA - Free Report) has an Earnings ESP of +7.55% and a Zacks Rank #3.
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