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Henry Schein (HSIC) Q4 Earnings Top Estimates, Margins Grow
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Henry Schein, Inc. (HSIC - Free Report) reported adjusted earnings per share (EPS) of $1.07 from continuing operations in the fourth quarter of 2021, reflecting a 7% rise year over year. Moreover, adjusted EPS surpassed the Zacks Consensus Estimate by 18.9%. The quarter’s adjustments exclude the impact of certain restructuring charges, among others.
GAAP EPS in the fourth quarter was $1.05 versus the year-ago EPS of 99 cents, reflecting a rise of 6.1%.
For the full year, adjusted earnings from continuing operations were $4.52 per share, 52.2% up from the year-ago period. It also beat the Zacks Consensus Estimate by 3.9%.
Revenues in Detail
Henry Schein reported net sales of $3.33 billion in the fourth quarter, up 5.2% year over year. The metric beat the Zacks Consensus Estimate by 4.7%.
The year-over-year uptick included 1.4% internal growth in local currencies, 4.3% growth from acquisitions and 0.5% decline related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.48 billion in the North American market, up 7.1% year over year. Sales totaled $850.1 million in the international market, down 0.1% year over year.
Full-year revenues were $12.40 billion, reflecting a 22.6% increase from the year-ago period. Revenues also surpassed the Zacks Consensus Estimate by 1.2%.
Segment Analysis
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the fourth quarter, the company recorded $2.02 billion of global Dental sales, up 9.4% year over year. In local currencies, the segment’s revenues include internally-generated sales growth of 6.4%, 3.9% growth from acquisitions and 0.9% decline related to foreign currency exchange. Further, the internal growth in local currencies of 6.4% included an increase of 9.3% in North America and a rise of 2.5% internationally.
Henry Schein’s uptick in overall dental sales performance reflects a continued recovery in patient traffic compared to the pre-pandemic levels.
Henry Schein, Inc. Price, Consensus and EPS Surprise
North America’s dental consumable merchandise’s internal sales in local currencies rose 10.3%, whereas dental equipment internal sales in local currencies rose 6.6%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 1.9% and 4.2%, respectively.
Global Medical revenues fell 3.2% year over year to $1.10 billion. The segment’s revenues include a decrease of 7.1% in internal local currencies and 3.9% growth from acquisitions. There was no impact related to foreign currency exchange.
Revenues from global Technology and Value-added Services rose 27.8% to $177.2 million. This included a rise of 13.4% in internal local currency sales and 14.4% growth from acquisitions. There was no impact related to foreign currency exchange.
Margin Trend
In the reported quarter, gross profit totaled $979.5 million, reflecting a 13.9% uptick year over year. Gross margin expanded 225 basis points (bps) to 29.4%.
Selling, general and administrative expenses rose 14.9% to $774.4 million in the quarter under review.
Overall adjusted operating profit was $205.1 million, reflecting a rise of 10.5% year over year. Adjusted operating margin expanded 30 bps year over year to 6.2%.
Financial Position
The company exited 2021 with cash and cash equivalents of $117.9 million compared with $421.2 million at the end of 2020. Long-term debt for the company at the end of 2021 was $811.3 million compared with $515.8 million at the end of 2020.
Cumulative net cash provided by operating activities from continuing operations till the end of 2021 was $709.6 million compared with $593.5 million in the year-ago period.
During the fourth quarter of 2021, the company repurchased shares of its common stock for a total of approximately $150 million.
2022 Guidance
Henry Schein has updated the EPS guidance for 2022.
For 2022, Henry Schein expects adjusted EPS from continuing operations in the range of $4.75 to $4.91, suggesting 7-10% growth compared with 2020. This compares with preliminary adjusted EPS from continuing operations guidance (issued on Nov 2, 2021) for 2022, suggesting mid-to-high single-digit growth over 2021. The Zacks Consensus Estimate for the same is currently pegged at $4.66.
Our Take
Henry Schein exited the fourth quarter of 2021 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. In the International Dental business, the company registered strong sales growth in the U.K., driven by a continued recovery. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well.
Meanwhile, Henry Schein continued to experience delivery and installation delays in the U.S. traditional dental equipment business during the reported quarter. Moreover, the rise in operating costs is building pressure on the bottom line.
Zacks Rank and Other Key Picks
Henry Schein currently carries a Zacks Rank #2 (Buy)
Envista reported second-quarter 2021 adjusted EPS of 46 cents, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $651.8 million outpaced the consensus mark by 2.9%.
Envista has a long-term earnings growth rate of 13.5%. NVST has gained 20.5% against the industry’s 19.4% drop over the past year.
McKesson reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 49.7% compared with the industry’s 4.7% growth in the past year.
Molina Healthcare reported fourth-quarter 2021 adjusted earnings of $2.88 per share, beating the Zacks Consensus Estimate of $2.82. Total revenues of $7,409 million beat the consensus mark of $7,126 million.
Molina Healthcare has a long-term earnings growth rate of 18.8%. MOH has gained 42.7% compared with the industry’s 43.2% increase over the past year.
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Henry Schein (HSIC) Q4 Earnings Top Estimates, Margins Grow
Henry Schein, Inc. (HSIC - Free Report) reported adjusted earnings per share (EPS) of $1.07 from continuing operations in the fourth quarter of 2021, reflecting a 7% rise year over year. Moreover, adjusted EPS surpassed the Zacks Consensus Estimate by 18.9%. The quarter’s adjustments exclude the impact of certain restructuring charges, among others.
GAAP EPS in the fourth quarter was $1.05 versus the year-ago EPS of 99 cents, reflecting a rise of 6.1%.
For the full year, adjusted earnings from continuing operations were $4.52 per share, 52.2% up from the year-ago period. It also beat the Zacks Consensus Estimate by 3.9%.
Revenues in Detail
Henry Schein reported net sales of $3.33 billion in the fourth quarter, up 5.2% year over year. The metric beat the Zacks Consensus Estimate by 4.7%.
The year-over-year uptick included 1.4% internal growth in local currencies, 4.3% growth from acquisitions and 0.5% decline related to foreign currency exchange.
In the quarter under review, the company recorded sales of $2.48 billion in the North American market, up 7.1% year over year. Sales totaled $850.1 million in the international market, down 0.1% year over year.
Full-year revenues were $12.40 billion, reflecting a 22.6% increase from the year-ago period. Revenues also surpassed the Zacks Consensus Estimate by 1.2%.
Segment Analysis
Henry Schein derives revenues from three operating segments — Dental, Medical, and Technology and Value-added Services.
In the fourth quarter, the company recorded $2.02 billion of global Dental sales, up 9.4% year over year. In local currencies, the segment’s revenues include internally-generated sales growth of 6.4%, 3.9% growth from acquisitions and 0.9% decline related to foreign currency exchange. Further, the internal growth in local currencies of 6.4% included an increase of 9.3% in North America and a rise of 2.5% internationally.
Henry Schein’s uptick in overall dental sales performance reflects a continued recovery in patient traffic compared to the pre-pandemic levels.
Henry Schein, Inc. Price, Consensus and EPS Surprise
North America’s dental consumable merchandise’s internal sales in local currencies rose 10.3%, whereas dental equipment internal sales in local currencies rose 6.6%. Internationally, dental consumable merchandise internal sales and dental equipment internal sales, both in local currencies, improved 1.9% and 4.2%, respectively.
Global Medical revenues fell 3.2% year over year to $1.10 billion. The segment’s revenues include a decrease of 7.1% in internal local currencies and 3.9% growth from acquisitions. There was no impact related to foreign currency exchange.
Revenues from global Technology and Value-added Services rose 27.8% to $177.2 million. This included a rise of 13.4% in internal local currency sales and 14.4% growth from acquisitions. There was no impact related to foreign currency exchange.
Margin Trend
In the reported quarter, gross profit totaled $979.5 million, reflecting a 13.9% uptick year over year. Gross margin expanded 225 basis points (bps) to 29.4%.
Selling, general and administrative expenses rose 14.9% to $774.4 million in the quarter under review.
Overall adjusted operating profit was $205.1 million, reflecting a rise of 10.5% year over year. Adjusted operating margin expanded 30 bps year over year to 6.2%.
Financial Position
The company exited 2021 with cash and cash equivalents of $117.9 million compared with $421.2 million at the end of 2020. Long-term debt for the company at the end of 2021 was $811.3 million compared with $515.8 million at the end of 2020.
Cumulative net cash provided by operating activities from continuing operations till the end of 2021 was $709.6 million compared with $593.5 million in the year-ago period.
During the fourth quarter of 2021, the company repurchased shares of its common stock for a total of approximately $150 million.
2022 Guidance
Henry Schein has updated the EPS guidance for 2022.
For 2022, Henry Schein expects adjusted EPS from continuing operations in the range of $4.75 to $4.91, suggesting 7-10% growth compared with 2020. This compares with preliminary adjusted EPS from continuing operations guidance (issued on Nov 2, 2021) for 2022, suggesting mid-to-high single-digit growth over 2021. The Zacks Consensus Estimate for the same is currently pegged at $4.66.
Our Take
Henry Schein exited the fourth quarter of 2021 on a bullish note with better-than-expected results. The company saw robust performances by all three of its operating businesses. The company’s international performance was also impressive. In the International Dental business, the company registered strong sales growth in the U.K., driven by a continued recovery. Growth within Henry Schein One continues to be driven primarily by a recovery in patient traffic in dental offices. Further, expansion of the gross margins bodes well.
Meanwhile, Henry Schein continued to experience delivery and installation delays in the U.S. traditional dental equipment business during the reported quarter. Moreover, the rise in operating costs is building pressure on the bottom line.
Zacks Rank and Other Key Picks
Henry Schein currently carries a Zacks Rank #2 (Buy)
Few other similar-ranked stocks in the broader medical space that have announced their quarterly results are Envista Holdings Corporation (NVST - Free Report) , McKesson Corporation (MCK - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Envista reported second-quarter 2021 adjusted EPS of 46 cents, which beat the Zacks Consensus Estimate by 9.5%. Revenues of $651.8 million outpaced the consensus mark by 2.9%.
Envista has a long-term earnings growth rate of 13.5%. NVST has gained 20.5% against the industry’s 19.4% drop over the past year.
McKesson reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.
McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 49.7% compared with the industry’s 4.7% growth in the past year.
Molina Healthcare reported fourth-quarter 2021 adjusted earnings of $2.88 per share, beating the Zacks Consensus Estimate of $2.82. Total revenues of $7,409 million beat the consensus mark of $7,126 million.
Molina Healthcare has a long-term earnings growth rate of 18.8%. MOH has gained 42.7% compared with the industry’s 43.2% increase over the past year.