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Henry Schein (HSIC) Set to Post Q4 Earnings: What Awaits?
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Henry Schein, Inc. (HSIC - Free Report) is expected to release fourth-quarter 2023 results on Feb 27 before the opening bell.
The company posted adjusted earnings per share (EPS) of $1.32 in the last reported quarter, which matched the Zacks Consensus Estimate. In the trailing four quarters, Henry Schein’s earnings matched estimates twice, surpassed once and missed in one quarter. The average surprise is 0.60%.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Throughout the months of 2023, Henry Schein continued to witness a year-over-year massive decline in sales of PPE (Personal Protective Equipment) products and COVID-19 test kits, which largely affected its results of operations. We expect this unfavorable trend to have continued in the fourth quarter of 2023. In addition to this, the company’s internal sales may have slowed down further due to soft market conditions from general macroeconomic weakness.
Meanwhile, increasing customer demand for lower-priced corporate brands, merchandise and generic products, coupled with the growth of equipment technical service revenues, is likely to have contributed to Henry Schein’s profitability in the to-be-reported quarter. The company is expected to have advanced toward its goal of achieving 40% of operating income from the sales of high-growth, high-margin products.
Within the Medical business, Henry Schein may have performed well in the fourth quarter of 2023, excluding the sales of PPE and COVID-19 test kits. A higher number of sales of lower-priced products, including generics and corporate brands, may have positively affected the segment’s revenues.
Moreover, the company expanded its medical business portfolio with the acquisition of Shield Healthcare — a leading supplier of homecare medical products. This acquisition may have benefited Henry Schein in delivering medical products directly to patients, thereby positively affecting its top line in the to-be-reported quarter.
Our model projects the global Medical business revenues to decline 14.6% year over year in the fourth quarter of 2023.
Across the dental business, traditional dental equipment sales in North America are likely to have been strong in the fourth quarter of 2023, mostly reverting back to pre-pandemic levels. The company may have delivered robust equipment sales as a result of the purchasing dynamics of large DSOs (Dental Service Organizations).
In addition, the overall volumes of consumable merchandise are likely to have remained steady across the international regions. This is likely to have been positively reflected in the company’s fourth-quarter revenues as well. In late December 2023, Henry Schein’s dental laboratory business announced an exclusive distribution agreement of Myerson’s newly launched Trusana Premium Denture System. The addition strengthens the HSIC’s portfolio of dental laboratory solutions to help improve customers’ production processes and enhance patient outcomes.
The company announced plans to enter the extremity segment of the orthopedic market by acquiring a majority interest in TriMed and a strategic relationship with Extremity Medical LLC. We expect all these developments to have favored the company’s performance in the fourth quarter of 2023.
Within dental specialties, Henry Schein may have further captured global market share in the to-be-reported quarter. The acquisitions of Biotech Dental in France and S.I.N. Implant System in Brazil may have contributed to the robust growth in implants and related products in the local markets. Both Henry Schein’s endodontic business and the clear aligner segment of the orthodontic business are expected to have strongly performed and favored revenues in the fourth quarter of 2023.
Going by our model, global Dental business revenues are expected to decrease 7.2% compared to last year’s same period.
In the fourth quarter of 2023, Henry Schein’s Technology and value-added services businesses are expected to have continued their strong sales momentum. This may have been driven by Henry Schein One practice management software sales and the acquisition of Large Practice Sales. As witnessed in the earlier months, Henry Schein One's growth is likely to have been driven by practice management software solutions and the company’s cloud-based solutions — Dentrix Ascend and Dentally.
HSIC may have also benefited from its new platform, Lighthouse 360, which contains features like online patient scheduling, digital customized forms for patient intake and payment reminders and more. Earlier, HSIC introduced new features and upgrades to the product, which is critical for the company’s vision to grow the practice management customer base and increase the breadth of solutions offered to its existing customers. We assume this development to be favorably reflected in the company’s revenues in the fourth quarter of 2023.
Our model projects HSIC’s global Technology and value-added services revenues to reflect an improvement of 10.9% compared to last year’s comparable period.
Q4 Estimates
The Zacks Consensus Estimate for HSIC’s fourth-quarter 2023 revenues is pegged at $3.1 billion. This suggests a decrease of 8.7% from the year-ago reported figure.
The Zacks Consensus Estimate for its fourth-quarter 2023 EPS stands at 71 cents, indicating a year-over-year fall of 41.3%.
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 a higher chance of beating estimates, which is not the case here.
Earnings ESP: Henry Schein has an Earnings ESP of -5.93%. 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 #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat in their upcoming release.
DVA has an expected long-term earnings growth rate of 17.3% compared with the industry’s 12.1%. The company delivered an earnings surprise of 22.2% in the last reported quarter.
United Therapeutics (UTHR - Free Report) has an Earnings ESP of +17.98% and a Zacks Rank #2. The company is set to release its fourth-quarter 2023 results on Feb 21.
UTHR has an expected earnings growth rate of 29.3% in 2023 compared with the S&P 500’s 14.2%. In the last reported quarter, the company delivered an earnings surprise of 10%.
Sarepta Therapeutics (SRPT - Free Report) currently has an Earnings ESP of +775.01% and a Zacks Rank #2. The company is expected to release its fourth-quarter 2023 results on Feb 27.
SRPT has an expected earnings growth rate of 18.2% for 2023. In the trailing four quarters, the company delivered an average earnings surprise of 48.7%.
Image: Bigstock
Henry Schein (HSIC) Set to Post Q4 Earnings: What Awaits?
Henry Schein, Inc. (HSIC - Free Report) is expected to release fourth-quarter 2023 results on Feb 27 before the opening bell.
The company posted adjusted earnings per share (EPS) of $1.32 in the last reported quarter, which matched the Zacks Consensus Estimate. In the trailing four quarters, Henry Schein’s earnings matched estimates twice, surpassed once and missed in one quarter. The average surprise is 0.60%.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Throughout the months of 2023, Henry Schein continued to witness a year-over-year massive decline in sales of PPE (Personal Protective Equipment) products and COVID-19 test kits, which largely affected its results of operations. We expect this unfavorable trend to have continued in the fourth quarter of 2023. In addition to this, the company’s internal sales may have slowed down further due to soft market conditions from general macroeconomic weakness.
Meanwhile, increasing customer demand for lower-priced corporate brands, merchandise and generic products, coupled with the growth of equipment technical service revenues, is likely to have contributed to Henry Schein’s profitability in the to-be-reported quarter. The company is expected to have advanced toward its goal of achieving 40% of operating income from the sales of high-growth, high-margin products.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
Within the Medical business, Henry Schein may have performed well in the fourth quarter of 2023, excluding the sales of PPE and COVID-19 test kits. A higher number of sales of lower-priced products, including generics and corporate brands, may have positively affected the segment’s revenues.
Moreover, the company expanded its medical business portfolio with the acquisition of Shield Healthcare — a leading supplier of homecare medical products. This acquisition may have benefited Henry Schein in delivering medical products directly to patients, thereby positively affecting its top line in the to-be-reported quarter.
Our model projects the global Medical business revenues to decline 14.6% year over year in the fourth quarter of 2023.
Across the dental business, traditional dental equipment sales in North America are likely to have been strong in the fourth quarter of 2023, mostly reverting back to pre-pandemic levels. The company may have delivered robust equipment sales as a result of the purchasing dynamics of large DSOs (Dental Service Organizations).
In addition, the overall volumes of consumable merchandise are likely to have remained steady across the international regions. This is likely to have been positively reflected in the company’s fourth-quarter revenues as well. In late December 2023, Henry Schein’s dental laboratory business announced an exclusive distribution agreement of Myerson’s newly launched Trusana Premium Denture System. The addition strengthens the HSIC’s portfolio of dental laboratory solutions to help improve customers’ production processes and enhance patient outcomes.
The company announced plans to enter the extremity segment of the orthopedic market by acquiring a majority interest in TriMed and a strategic relationship with Extremity Medical LLC. We expect all these developments to have favored the company’s performance in the fourth quarter of 2023.
Within dental specialties, Henry Schein may have further captured global market share in the to-be-reported quarter. The acquisitions of Biotech Dental in France and S.I.N. Implant System in Brazil may have contributed to the robust growth in implants and related products in the local markets. Both Henry Schein’s endodontic business and the clear aligner segment of the orthodontic business are expected to have strongly performed and favored revenues in the fourth quarter of 2023.
Going by our model, global Dental business revenues are expected to decrease 7.2% compared to last year’s same period.
In the fourth quarter of 2023, Henry Schein’s Technology and value-added services businesses are expected to have continued their strong sales momentum. This may have been driven by Henry Schein One practice management software sales and the acquisition of Large Practice Sales. As witnessed in the earlier months, Henry Schein One's growth is likely to have been driven by practice management software solutions and the company’s cloud-based solutions — Dentrix Ascend and Dentally.
HSIC may have also benefited from its new platform, Lighthouse 360, which contains features like online patient scheduling, digital customized forms for patient intake and payment reminders and more. Earlier, HSIC introduced new features and upgrades to the product, which is critical for the company’s vision to grow the practice management customer base and increase the breadth of solutions offered to its existing customers. We assume this development to be favorably reflected in the company’s revenues in the fourth quarter of 2023.
Our model projects HSIC’s global Technology and value-added services revenues to reflect an improvement of 10.9% compared to last year’s comparable period.
Q4 Estimates
The Zacks Consensus Estimate for HSIC’s fourth-quarter 2023 revenues is pegged at $3.1 billion. This suggests a decrease of 8.7% from the year-ago reported figure.
The Zacks Consensus Estimate for its fourth-quarter 2023 EPS stands at 71 cents, indicating a year-over-year fall of 41.3%.
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 a higher chance of beating estimates, which is not the case here.
Earnings ESP: Henry Schein has an Earnings ESP of -5.93%. 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 #4 (Sell).
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat in their upcoming release.
DaVita (DVA - Free Report) has an Earnings ESP of +7.83% and sports a Zacks Rank #1. The company is expected to release its first-quarter 2024 results on May 13. You can see the complete list of today’s Zacks #1 Rank stocks here.
DVA has an expected long-term earnings growth rate of 17.3% compared with the industry’s 12.1%. The company delivered an earnings surprise of 22.2% in the last reported quarter.
United Therapeutics (UTHR - Free Report) has an Earnings ESP of +17.98% and a Zacks Rank #2. The company is set to release its fourth-quarter 2023 results on Feb 21.
UTHR has an expected earnings growth rate of 29.3% in 2023 compared with the S&P 500’s 14.2%. In the last reported quarter, the company delivered an earnings surprise of 10%.
Sarepta Therapeutics (SRPT - Free Report) currently has an Earnings ESP of +775.01% and a Zacks Rank #2. The company is expected to release its fourth-quarter 2023 results on Feb 27.
SRPT has an expected earnings growth rate of 18.2% for 2023. In the trailing four quarters, the company delivered an average earnings surprise of 48.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.