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Henry Schein (HSIC) to Report Q1 Earnings: What's in Store?
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Henry Schein, Inc. (HSIC - Free Report) is scheduled to report first-quarter 2020 results on May 5, before market open. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.6%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average positive beat being 4.4%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
In the first quarter, Henry Schein is expected to have witnessed the adverse impact of the coronavirus pandemic on revenues across all segments, namely Dental, Medical and Technology plus Value-Added Services. However, expansion across all geographies and product adoption are likely to have somewhat mitigated the impact.
In the first two months of first-quarter 2020, this segment is expected to have registered growth on consistent strength in dental equipment and services in North America. Internationally, the segment is likely to have been driven by continued robust dental consumable merchandise sales on growing demand. International consumable merchandise, in turn, has likely been driven by broad-based gains across most international businesses, similar to the fourth quarter of 2019.
However, since late February, when the impact of the coronavirus got severe, the global healthcare industry started to postpone non-emergency and elective procedures to focus on COVID-19 treatments. This is likely to have weighed on the company’s dental sales.
Further, Henry Schein’s China dental business is expected to have been heavily impacted by the outbreak since the start of the first quarter. However, its assuring to know that the company’s share of dental sale in this region, as a proportion of total global dental sales, is relatively small (as confirmed during the fourth-quarter earnings call).
The company has been making concerted efforts to expand in the field of digital dentistry globally. It has thus most likely benefited from digitalization in the international dental market in the first quarter. However, the postponement of non-emergency and elective procedures is expected to have hurt the digital dentistry segment.
The Zacks Consensus Estimate for first-quarter North American dental revenues is pegged at $984 million, suggesting a 6.5% rise from the year-ago reported figure. The consensus estimate for international Dental revenues is pegged at $620 million, implying a 0.5% fall from the prior-year reported number.
Medical Business
Henry Schein’s worldwide Medical revenues rose 15.2% year over year in the last reported quarter. In the first two months of the first quarter, the company is expected to have maintained strong organic growth on a broad customer base and growing new patient traffic. The acquisition of North American Rescue, a leading provider of mission-critical medical products for the defense and Public Safety markets, is expected to kept contributing to the top line during the first quarter.
In the second half of March, Henry Schein announced the availability of an antibody rapid blood test, Standard Q COVID-19 IgM/IgG Rapid Test, which is intended to be administered at the point of care. Although rolled out during the end of the quarter, this too is likely to have contributed to the top line on robust market adoption.
Further, during the fourth-quarter earnings call (in February), the company noted about an expected surge in demand for personal protective equipment, such as masks and gowns, amid the pandemic. However, it also apprehended supply disruption in the quarter.
The Zacks Consensus Estimate for first-quarter North American Medical revenues is pegged at $710 million, suggesting a 7.3% uptick from the year-ago reported figure. The consensus estimate for international Medical revenues is pinned at $22.4 million, indicating a 4.8% rise from the prior-year reported number.
Technology and Value-Added Services Business
Henry Schein is steadily progressing with an array of product launches within this business. The company’s first-quarter performance is expected to have benefited from consistent contribution of its joint venture with Internet Brands on dental technology that resulted in the formation of Henry Schein One.
Further, Henry Schein is expected to have continued benefiting from the previously-closed acquisitions of Elite Computer Italia and Lighthouse.
The Zacks Consensus Estimate for first-quarter North American Technology and Value-Added Services revenues is pegged at $103 million, suggesting a 12.7% decline from the last reported quarter. The consensus estimate for international Technology and Value-Added Services revenues is pegged at $20.8 million, implying a 6.8% uptick from the last reported quarter.
The Estimate Picture
For first-quarter 2020, the Zacks Consensus Estimate for total revenues of $2.34 billion implies a decline of 0.9% from the prior-year reported figure. Also, the consensus estimate for earnings is pegged at 77 cents, indicating a fall of 3.8% from the prior-year reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has good chances of beating estimates. However, that is not the case here as you can see:
Zacks Rank: The company currently carries a Zacks Rank #3.
Earnings ESP: Henry Schein has an Earnings ESP of -7.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Aphria Inc. , carrying a Zacks Rank of 2 at present, has an Earnings ESP of +35.71%.
ViewRay, Inc. is a Zacks #2 Ranked stock with an Earnings ESP of +10.00%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Henry Schein (HSIC) to Report Q1 Earnings: What's in Store?
Henry Schein, Inc. (HSIC - Free Report) is scheduled to report first-quarter 2020 results on May 5, before market open. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.6%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average positive beat being 4.4%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
In the first quarter, Henry Schein is expected to have witnessed the adverse impact of the coronavirus pandemic on revenues across all segments, namely Dental, Medical and Technology plus Value-Added Services. However, expansion across all geographies and product adoption are likely to have somewhat mitigated the impact.
Let us delve deeper.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
Dental Business
In the first two months of first-quarter 2020, this segment is expected to have registered growth on consistent strength in dental equipment and services in North America. Internationally, the segment is likely to have been driven by continued robust dental consumable merchandise sales on growing demand. International consumable merchandise, in turn, has likely been driven by broad-based gains across most international businesses, similar to the fourth quarter of 2019.
However, since late February, when the impact of the coronavirus got severe, the global healthcare industry started to postpone non-emergency and elective procedures to focus on COVID-19 treatments. This is likely to have weighed on the company’s dental sales.
Further, Henry Schein’s China dental business is expected to have been heavily impacted by the outbreak since the start of the first quarter. However, its assuring to know that the company’s share of dental sale in this region, as a proportion of total global dental sales, is relatively small (as confirmed during the fourth-quarter earnings call).
The company has been making concerted efforts to expand in the field of digital dentistry globally. It has thus most likely benefited from digitalization in the international dental market in the first quarter. However, the postponement of non-emergency and elective procedures is expected to have hurt the digital dentistry segment.
The Zacks Consensus Estimate for first-quarter North American dental revenues is pegged at $984 million, suggesting a 6.5% rise from the year-ago reported figure. The consensus estimate for international Dental revenues is pegged at $620 million, implying a 0.5% fall from the prior-year reported number.
Medical Business
Henry Schein’s worldwide Medical revenues rose 15.2% year over year in the last reported quarter. In the first two months of the first quarter, the company is expected to have maintained strong organic growth on a broad customer base and growing new patient traffic. The acquisition of North American Rescue, a leading provider of mission-critical medical products for the defense and Public Safety markets, is expected to kept contributing to the top line during the first quarter.
In the second half of March, Henry Schein announced the availability of an antibody rapid blood test, Standard Q COVID-19 IgM/IgG Rapid Test, which is intended to be administered at the point of care. Although rolled out during the end of the quarter, this too is likely to have contributed to the top line on robust market adoption.
Further, during the fourth-quarter earnings call (in February), the company noted about an expected surge in demand for personal protective equipment, such as masks and gowns, amid the pandemic. However, it also apprehended supply disruption in the quarter.
The Zacks Consensus Estimate for first-quarter North American Medical revenues is pegged at $710 million, suggesting a 7.3% uptick from the year-ago reported figure. The consensus estimate for international Medical revenues is pinned at $22.4 million, indicating a 4.8% rise from the prior-year reported number.
Technology and Value-Added Services Business
Henry Schein is steadily progressing with an array of product launches within this business. The company’s first-quarter performance is expected to have benefited from consistent contribution of its joint venture with Internet Brands on dental technology that resulted in the formation of Henry Schein One.
Further, Henry Schein is expected to have continued benefiting from the previously-closed acquisitions of Elite Computer Italia and Lighthouse.
The Zacks Consensus Estimate for first-quarter North American Technology and Value-Added Services revenues is pegged at $103 million, suggesting a 12.7% decline from the last reported quarter. The consensus estimate for international Technology and Value-Added Services revenues is pegged at $20.8 million, implying a 6.8% uptick from the last reported quarter.
The Estimate Picture
For first-quarter 2020, the Zacks Consensus Estimate for total revenues of $2.34 billion implies a decline of 0.9% from the prior-year reported figure. Also, the consensus estimate for earnings is pegged at 77 cents, indicating a fall of 3.8% from the prior-year reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has good chances of beating estimates. However, that is not the case here as you can see:
Zacks Rank: The company currently carries a Zacks Rank #3.
Earnings ESP: Henry Schein has an Earnings ESP of -7.34%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Exact Sciences Corporation (EXAS - Free Report) currently carries a Zacks Rank of 2 and has an Earnings ESP of +2.28%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aphria Inc. , carrying a Zacks Rank of 2 at present, has an Earnings ESP of +35.71%.
ViewRay, Inc. is a Zacks #2 Ranked stock with an Earnings ESP of +10.00%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>