Have you evaluated the performance of Phibro Animal Health's (PAHC Quick QuotePAHC - Free Report) international operations during the quarter that concluded in June 2024? Considering the extensive worldwide presence of this maker of animal health products and nutritional supplements, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. For investors, understanding a company's reliance on overseas markets has become increasingly crucial, as it offers insights into the company's sustainability of earnings, ability to tap into diverse economic cycles and overall growth potential.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Upon examining PAHC's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

For the quarter, the company's total revenue amounted to $273.16 million, experiencing an increase of 7.1% year over year. Next, we'll explore the breakdown of PAHC's international revenue to understand the importance of its overseas business operations.

A Dive into PAHC's International Revenue Trends

Latin America and Canada accounted for 25.7% of the company's total revenue during the quarter, translating to $70.17 million. Revenues from this region represented a surprise of +14.64%, with Wall Street analysts collectively expecting $61.21 million. When compared to the preceding quarter and the same quarter in the previous year, Latin America and Canada contributed $53.65 million (20.4%) and $59.9 million (23.5%) to the total revenue, respectively.

Europe, Middle East and Africa generated $32.41 million in revenues for the company in the last quarter, constituting 11.9% of the total. This represented a surprise of -5.12% compared to the $34.16 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe, Middle East and Africa accounted for $33.18 million (12.6%), and in the year-ago quarter, it contributed $32.3 million (12.7%) to the total revenue.

During the quarter, Asia Pacific contributed $16.91 million in revenue, making up 6.2% of the total revenue. When compared to the consensus estimate of $19.02 million, this meant a surprise of -11.08%. Looking back, Asia Pacific contributed $17.08 million, or 6.5%, in the previous quarter, and $17.8 million, or 7%, in the same quarter of the previous year.

Anticipated Revenues in Overseas Markets

For the current fiscal quarter, it is anticipated by Wall Street analysts that Phibro will report a total revenue of $292.95 million, which reflects an increase of 26.7% from the same quarter in the previous year. The revenue contributions are expected to be 24.4% from Latin America and Canada ($71.56 million), 12.8% from Europe, Middle East and Africa ($37.45 million) and 6% from Asia Pacific ($17.46 million).

For the full year, a total revenue of $1.44 billion is expected for the company, reflecting an increase of 41.6% from the year before. The revenues from Latin America and Canada, Europe, Middle East and Africa and Asia Pacific are expected to make up 19.2%, 11.4% and 5.4% of this total, corresponding to $277.23 million, $164.79 million and $77.89 million respectively.

Final Thoughts

Relying on international markets for revenues, Phibro faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Phibro currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Review of Phibro's Recent Stock Market Performance

Over the past month, the stock has gained 18.4% versus the Zacks S&P 500 composite's 4% increase. The Zacks Medical sector, of which Phibro is a part, has risen 5.7% over the same period. The company's shares have increased 22.4% over the past three months compared to the S&P 500's 8.2% increase. Over the same period, the sector has risen 9.1%.