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Phibro Animal Health (PAHC) Up 10% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Phibro Animal Health Corporation (PAHC - Free Report) . Shares have added about 10% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Phibro Posts In-Line Earnings in Q3, Revises View
Phibro Animal Health reported adjusted earnings per share (EPS) of $0.37 in the third quarter of fiscal 2017, down 7.5% year over year. Adjusted EPS, however, remained in line with the Zacks Consensus Estimate. According to the company, the year-over-year decline was primarily due to lower gross margin and a higher effective income tax rate.
Including one-time items, the company reported EPS of $0.59, reflecting a 28.3% jump from the year-ago quarter.
Net Sales
In the reported quarter, Phibro’s net sales were $189.9 million, up 3.5% year over year. The improvement was driven by sales growth in the Animal Health and Mineral Nutrition segment, which was partially offset by sluggish Performance Products sales.
Sales by Segments
Net sales at the Animal Health segment increased 2% to $121 million in the reported quarter on the back of volume increases in the nutritional specialty and vaccine product groups within the segment. While nutritional specialty products grew 21%, sales from vaccines increased 30%, principally on volume growth of products for poultry and swine industries.
However, sales at Medicated feed additives and Other fell 7% primarily due to volume declines both domestically and internationally. This resulted from reduced volumes of medically important antibacterials and economic conditions in Brazil.
Net sales at the Mineral Nutrition segment increased 8% to $57.2 million on increased volumes and higher average selling prices resulting from underlying raw material commodity price increase.
Net sales at the Performance Products segment declined 3% to $11.7 million. This was due to lower average selling prices of personal care ingredients and copper-based products and lower volumes of copper-based products, partially offset by higher volumes of personal care ingredients.
Operational Update
Phibro’s fiscal third-quarter gross profit increased 3.1% year over year to $60.6 million. The gross margin, however, contracted 10 basis points (bps) to 31.9%.
Selling, general and administrative expenses dropped 19% to $30.6 million. Operating margin expanded 420 bps year over year to 15.8% in the quarter.
Financial Update
Year to date, Phibro generated $84.8 million in cash flow from operations compared with $10.6 million in the year-ago period. Capital expenditure amounted to $15.4 million in this period, reflecting a reduction from $28.6 million in the first nine months of fiscal 2016.
FY17 Outlook
Phibro narrowed its fiscal 2017 revenue guidance. The company currently expects to generate net sales of $760–$765 million compared with the earlier range of $750–$770 million, reflecting 1–2% annualized growth for the fiscal year. The current Zacks Consensus Estimate of $756.8 million falls in the guided range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Phibro Animal Health Corporation Price and Consensus
At this time, the stock has an average Growth Score of 'C', while Momentum is lagging a lot with a 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Phibro Animal Health (PAHC) Up 10% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Phibro Animal Health Corporation (PAHC - Free Report) . Shares have added about 10% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Phibro Posts In-Line Earnings in Q3, Revises View
Phibro Animal Health reported adjusted earnings per share (EPS) of $0.37 in the third quarter of fiscal 2017, down 7.5% year over year. Adjusted EPS, however, remained in line with the Zacks Consensus Estimate. According to the company, the year-over-year decline was primarily due to lower gross margin and a higher effective income tax rate.
Including one-time items, the company reported EPS of $0.59, reflecting a 28.3% jump from the year-ago quarter.
Net Sales
In the reported quarter, Phibro’s net sales were $189.9 million, up 3.5% year over year. The improvement was driven by sales growth in the Animal Health and Mineral Nutrition segment, which was partially offset by sluggish Performance Products sales.
Sales by Segments
Net sales at the Animal Health segment increased 2% to $121 million in the reported quarter on the back of volume increases in the nutritional specialty and vaccine product groups within the segment. While nutritional specialty products grew 21%, sales from vaccines increased 30%, principally on volume growth of products for poultry and swine industries.
However, sales at Medicated feed additives and Other fell 7% primarily due to volume declines both domestically and internationally. This resulted from reduced volumes of medically important antibacterials and economic conditions in Brazil.
Net sales at the Mineral Nutrition segment increased 8% to $57.2 million on increased volumes and higher average selling prices resulting from underlying raw material commodity price increase.
Net sales at the Performance Products segment declined 3% to $11.7 million. This was due to lower average selling prices of personal care ingredients and copper-based products and lower volumes of copper-based products, partially offset by higher volumes of personal care ingredients.
Operational Update
Phibro’s fiscal third-quarter gross profit increased 3.1% year over year to $60.6 million. The gross margin, however, contracted 10 basis points (bps) to 31.9%.
Selling, general and administrative expenses dropped 19% to $30.6 million. Operating margin expanded 420 bps year over year to 15.8% in the quarter.
Financial Update
Year to date, Phibro generated $84.8 million in cash flow from operations compared with $10.6 million in the year-ago period. Capital expenditure amounted to $15.4 million in this period, reflecting a reduction from $28.6 million in the first nine months of fiscal 2016.
FY17 Outlook
Phibro narrowed its fiscal 2017 revenue guidance. The company currently expects to generate net sales of $760–$765 million compared with the earlier range of $750–$770 million, reflecting 1–2% annualized growth for the fiscal year. The current Zacks Consensus Estimate of $756.8 million falls in the guided range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Phibro Animal Health Corporation Price and Consensus
Phibro Animal Health Corporation Price and Consensus | Phibro Animal Health Corporation Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', while Momentum is lagging a lot with a 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth and momentum.
Outlook
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.