Henry Schein, Inc. HSIC is expected to report first-quarter 2023 results shortly.
In the last reported quarter, the company’s earnings of $1.21 came in line with the Zacks Consensus Estimate. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and matched on one occasion, the average beat being 2.97%.
Let’s see how things have shaped up prior to this announcement.
Henry Schein’s Dental business is likely to have gained from the acquisition of Midway Dental in the United States and Condor Dental in Switzerland in the first quarter. The company has also acquired a majority stake in Unitas and completed the acquisition of a majority ownership stake of Biotech Dental S.A.S. These newly-added businesses are expected to have strengthened the company’s longstanding presence in the United States and worldwide, providing dental customers an expanded portfolio of solutions.
Added to this, improved patient traffic is expected to have boosted the top line as COVID-led severity declines globally. The Dental business is likely to have benefited from strong global equipment sales, similar to the last reported quarter, as dentists continued to invest in their practices. The dental business is likely to have seen robust sales contributions from dental specialty products, specifically within the oral surgery category.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
However, the company’s consumable merchandise internal sales growth in local currencies, excluding PP&E and COVID-related products, might have been impacted by the industrywide trend of staffing shortages in the first quarter.
The Zacks Consensus Estimate for the company’s first-quarter global Dental business revenues is pegged at $1.80 billion, suggesting a 1.5% decline from the year-ago quarter’s reported figure.
The medical business is expected to have gained from improved U.S. patient traffic to physician offices, ultimate care sites and ambulatory surgical centers. The segment is likely to have witnessed continued demand for medical laboratory equipment and non-COVID point-of-care diagnostic tests, as it did in the previous quarter. The continued growth of new accounts across the independent and large group practices as well as surgical centers and urgent care facilities are expected to have driven the top line in the first quarter.
However, sales of personal protective equipment (PPE) products and COVID-19 test kits are likely to have continued the downward rally with declining COVID-19 cases globally in the first quarter compared with the year-ago period.
The Zacks Consensus Estimate for the company’s first-quarter global Medical business revenues is pegged at $1.14 billion, suggesting a 2.6% decline from the year-ago quarter reported figure.
Technology and Value-Added Services Business
Henry Schein’s technology and value-added services business is likely to have gained from continued strength in Henry Schein One, which provides one of the broadest product offerings of dental practice management and related software and services. The company is expected to have witnessed strength in its practice management business, including Dentrix practice management software and Dentrix Ascend.
The growth within Henry Schein One in the fourth quarter was primarily driven by a recovery in patient traffic to dental offices and growth within the company’s cloud-based solutions. Healthy demand from the company’s national DSO accounts for Dentrix Ascend and Dentally cloud-based solutions contributed to the growth. We expect this growth momentum to have continued in the first quarter, benefiting the business.
As of now, the Zacks Consensus Estimate for the company’s first-quarter global Technology and Valued-Added Services business revenues is pegged at $190 million, suggesting an improvement of 6.1% from the year-ago quarter’s reported figure.
The Estimate Picture
For first-quarter 2023, the Zacks Consensus Estimate for total revenues is pegged at $3.09 billion, implying a decline of 2.6% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $1.24, indicating a decrease of 4.6% from the prior-year quarter’s 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 higher chances of beating estimates. This is exactly the case as you can see below.
Earnings ESP: Henry Schein has an Earnings ESP of +0.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Other Stocks Worth a Look
Here are a few stocks worth considering, as these also have the right combination of elements to beat on earnings this reporting cycle.
Bio-Rad Laboratories BIO has an Earnings ESP of +0.16% and a Zacks Rank of #1. The company is slated to release first-quarter 2023 results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bio-Rad has an expected earnings growth rate of 10.3% for 2023. BIO’s earnings yield of 3.38% compares favorably with the industry’s (2.78%).
Quest Diagnostics DGX has an Earnings ESP of +0.54% and a Zacks Rank #3. The company will release first-quarter 2023 results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Quest Diagnostics has an expected earnings growth rate of 5.07% for the next year. DGX’s earnings yield of 6.10% compares favorably with the industry’s 3.26%.
Teva Pharmaceutical Industries Limited TEVA currently has an Earnings ESP of +14.97% and a Zacks Rank of #2. TEVA is expected to release first-quarter 2023 results on May 2.
TEVA’s growth rate is estimated to be 4.4% in 2024. TEVA’s earnings yield of 25.50% compares favorably with the industry’s (34.35%).
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