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Phibro Animal (PAHC) Beats on Q1 Earnings, Reiterates View
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Phibro Animal Health Corporation (PAHC - Free Report) reported adjusted earnings per share (EPS) of 38 cents in the first quarter of fiscal 2018, up 5.6% year over year. Adjusted EPS also surpassed the Zacks Consensus Estimate by a penny. According to the company, the year-over-year improvement was primarily driven by a higher gross profit ratio, reduced interest expenses and a lower effective income tax rate.
The company’s reported EPS of 39 cents, up 25.8% from the year-ago quarter.
Net Sales
In the reported quarter, Phibro’s net sales were $193.4 million, up 2.9% year over year. The improvement was driven by sales growth in the Animal Health, Mineral Nutrition segment and Performance Products.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Net sales at the Animal Health segment increased 3% to $128.8 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 17%, sales from vaccines increased 25%, principally on volume growth of products for poultry and swine industries.
However, sales at Medicated feed additives (MFAs) and Other fell 5% primarily due to volume decline.
Domestic net sales at MFAs and Other declined by $10.5 million due to reduced volumes of medically important antimicrobials and unfavorable timing of certain customer orders. International net sales increased by $6.7 million, driven by growth across most regions, including the benefit of improved economic conditions in Brazil.
Net sales at the Mineral Nutrition segment increased 1% to $52.1 million on higher average selling prices resulting from an increase in underlying raw material commodity price. However, the rise in average selling prices was partially offset by lower volumes of trace mineral products.
Net sales at the Performance Products segment increased 5% to $12.5 million on higher average selling prices and volumes of copper-based products.
Operational Update
Phibro’s fiscal first-quarter gross profit increased 3.4% year over year to $63.4 million. The gross margin expanded 33 basis points (bps) to 32.8%.
Selling, general and administrative expenses rose 4.6% to $41 million. Operating margin was marginally flat year over year at 11.6% in the quarter.
Financial Update
Year to date, Phibro generated $4.8 million in cash flow from operations compared with $21.5 million in the year-ago period. Capital expenditure amounted to $5 million in this period, reflecting a reduction from $5.9 million in the year-ago quarter.
FY18 Outlook
Phibro has reiterated its guidance for fiscal 2018. The company expects to generate net sales of $765-$790 million. The current Zacks Consensus Estimate of $780.2 million falls within the guided range.
Phibro provided its adjusted EPS guidance in the range of $1.55-$1.61. The current Zacks Consensus Estimate of $1.57 is also within the company's guided range.
Our Take
Phibro ended the fiscal 2018 first quarter on a solid note with Earnings ahead of the Zacks Consensus Estimate. The company witnessed considerable improvement across all segments. We are also encouraged by the expansion in the gross margin in the reported quarter.
Zacks Rank & Key Picks
Phibro has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. (PETS - Free Report) , Luminex Corporation and Intuitive Surgical, Inc. (ISRG - Free Report) . Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed reported earnings per share of 43 cents in the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 bps year over year to 35.2% in the reported quarter.
Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. Revenues increased almost 4.1% year over year to $74.1 million.
Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% year over year. Also, revenues rose 18% year over year to $806.1 million.
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Phibro Animal (PAHC) Beats on Q1 Earnings, Reiterates View
Phibro Animal Health Corporation (PAHC - Free Report) reported adjusted earnings per share (EPS) of 38 cents in the first quarter of fiscal 2018, up 5.6% year over year. Adjusted EPS also surpassed the Zacks Consensus Estimate by a penny. According to the company, the year-over-year improvement was primarily driven by a higher gross profit ratio, reduced interest expenses and a lower effective income tax rate.
The company’s reported EPS of 39 cents, up 25.8% from the year-ago quarter.
Net Sales
In the reported quarter, Phibro’s net sales were $193.4 million, up 2.9% year over year. The improvement was driven by sales growth in the Animal Health, Mineral Nutrition segment and Performance Products.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Phibro Animal Health Corporation Price, Consensus and EPS Surprise | Phibro Animal Health Corporation Quote
Sales by Segments
Net sales at the Animal Health segment increased 3% to $128.8 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 17%, sales from vaccines increased 25%, principally on volume growth of products for poultry and swine industries.
However, sales at Medicated feed additives (MFAs) and Other fell 5% primarily due to volume decline.
Domestic net sales at MFAs and Other declined by $10.5 million due to reduced volumes of medically important antimicrobials and unfavorable timing of certain customer orders. International net sales increased by $6.7 million, driven by growth across most regions, including the benefit of improved economic conditions in Brazil.
Net sales at the Mineral Nutrition segment increased 1% to $52.1 million on higher average selling prices resulting from an increase in underlying raw material commodity price. However, the rise in average selling prices was partially offset by lower volumes of trace mineral products.
Net sales at the Performance Products segment increased 5% to $12.5 million on higher average selling prices and volumes of copper-based products.
Operational Update
Phibro’s fiscal first-quarter gross profit increased 3.4% year over year to $63.4 million. The gross margin expanded 33 basis points (bps) to 32.8%.
Selling, general and administrative expenses rose 4.6% to $41 million. Operating margin was marginally flat year over year at 11.6% in the quarter.
Financial Update
Year to date, Phibro generated $4.8 million in cash flow from operations compared with $21.5 million in the year-ago period. Capital expenditure amounted to $5 million in this period, reflecting a reduction from $5.9 million in the year-ago quarter.
FY18 Outlook
Phibro has reiterated its guidance for fiscal 2018. The company expects to generate net sales of $765-$790 million. The current Zacks Consensus Estimate of $780.2 million falls within the guided range.
Phibro provided its adjusted EPS guidance in the range of $1.55-$1.61. The current Zacks Consensus Estimate of $1.57 is also within the company's guided range.
Our Take
Phibro ended the fiscal 2018 first quarter on a solid note with Earnings ahead of the Zacks Consensus Estimate. The company witnessed considerable improvement across all segments. We are also encouraged by the expansion in the gross margin in the reported quarter.
Zacks Rank & Key Picks
Phibro has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. (PETS - Free Report) , Luminex Corporation and Intuitive Surgical, Inc. (ISRG - Free Report) . Notably, PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PetMed reported earnings per share of 43 cents in the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 bps year over year to 35.2% in the reported quarter.
Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. Revenues increased almost 4.1% year over year to $74.1 million.
Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% year over year. Also, revenues rose 18% year over year to $806.1 million.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>