Henry Schein, Inc. HSIC is scheduled to report first-quarter 2022 results on Aug 2, before market open.
In the last reported quarter, the company’s earnings of $1.30 surpassed the Zacks Consensus Estimate by 7.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 15.05%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Henry Schein’s dental business is likely to have gained from improved patient traffic as economies around the world lift COVID-19 restrictions and return to the pre-pandemic level. The business is likely to have benefited from strong global equipment sales, similar to the last reported quarter, as dentists continue to invest in their practices.
The dental business will likely see robust sales contributions from dental specialty products, specifically within the oral surgery category. Per the first-quarter earnings call, Henry Schein’s implants and Ace Bone regeneration products recorded solid sales across both Europe and North America. The company’s Camlog and Merck Dentist brands successfully sold implants and bone regeneration products across Europe. This trend is likely to have continued through the entire second quarter, thus boosting the company’s top line.
In June 2022, Henry Schein entered into a definitive agreement to acquire Condor Dental Research Company SA (Condor Dental). This acquisition is stated to extend Henry Schein’s foray into the Swiss market for its dental distribution business. We expect this buyout to have a beneficial impact on the company’s results for the upcoming quarter.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
The Zacks Consensus Estimate for the company’s second-quarter global Dental business revenues is pegged at $1.94 billion, suggesting a rise of 105.8% 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.
However, sales of personal protective equipment (PPE) products are likely to have continued the downward rally with declining COVID-19 cases globally in Q2 compared with the year-ago period. In this regard, we may note that Henry Schein expects further pricing declines for gloves for the rest of 2022. Meanwhile, in terms of COVID-19 test sales, the company is likely to have witnessed lower COVID-19 testing demand in Q2 attributable to low infection rates. We expect this decrease in demand to have impacted the company’s second-quarter revenues.
The Zacks Consensus Estimate for the company’s second-quarter global Medical business revenues is pegged at $989.54 million, suggesting a rise of 60.2% from the year-ago quarter 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. Per management, the growth within Henry Schein One in the first quarter was primarily driven by a recovery in patient traffic to dental offices and growth within the company’s cloud-based solutions. We expect this growth momentum to have continued in Q2, benefiting the business.
During the first-quarter earnings update, the company noted that it was encouraged by the integration and performance of the eAssist business (acquired last year), which provides revenue cycle management solutions for insurance reimbursements. Moreover, the company’s practice management business, including Dentrix and Ascend, delivered strong sales growth in the previous quarter. We expect these businesses to have continued their growth momentum, driving the company’s revenues in the to-be-reported quarter as well.
As of now, the Zacks Consensus Estimate for the company’s second-quarter global Technology and Valued-Added Services business revenues is pegged at $176.2 million, suggesting an improvement of 67.5% from the year-ago quarter’s reported figure.
The Estimate Picture
For second-quarter 2022, the Zacks Consensus Estimate for total revenues of $3.10 billion implies an improvement of 4.4% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $1.12, indicating an increase of 0.9% 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:
Earnings ESP: Henry Schein has an Earnings ESP of +1.67%. 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 #3.
Stocks Worth a Look
Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Alcon Inc. ALC has an Earnings ESP of +5.07% and a Zacks Rank of #1. Alcon is expected to release second-quarter 2022 results on Aug 16. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcon’s long-term earnings growth rate is estimated at 14.4%. ALC’s earnings yield of 3.25% compared with the industry’s (8.98%).
Glaukos Corporation GKOS currently has an Earnings ESP of +2.27% and a Zacks Rank of #1. Glaukos is scheduled to release second-quarter 2022 results on Aug 3.
GKOS’ 2023 earnings growth rate is estimated at 15.2%.
BrainsWay Ltd. BWAY currently has an Earnings ESP of +33.33% and a Zacks Rank of #1. BrainsWay is expected to release second-quarter fiscal 2022 results on Aug 10.
BWAY’s 2023 earnings growth rate is estimated to be 16.7%.
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