Yahoo Finance Henry Schein (HSIC) to Report Q4 Earnings: What's in Store?
Henry Schein, Inc. HSIC is scheduled to report fourth-quarter 2022 results on Feb 16, before market open.
In the last reported quarter, the company’s earnings of $1.15 surpassed the Zacks Consensus Estimate by 0.88%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 7.7%.
Let’s see how things have shaped up prior to this announcement.
Factors to Note
Dental Business
Henry Schein’s Dental business is likely to have gained in Q4 from the acquisition of Midway Dental. This newly-added business is expected to have strengthened the company’s long-standing presence in the Midwest of the United States, providing dental customers of Midway access to an expanded portfolio of solutions.
Added to this, improved patient traffic as COVID-led severity gradually declines globally. The business is likely to have benefited from strong global equipment sales, similar to the last reported quarter, as dentists continue to invest in their practices. The dental business is likely to have seen robust sales contributions from dental specialty products, specifically within the oral surgery category.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
However, the company’s consumable merchandise internal sales growth in local currencies, excluding PP&E and COVID-related products, might have been impacted by the industrywide trend of staffing shortages in Q4.
The Zacks Consensus Estimate for the company’s fourth-quarter global Dental business revenues is pegged at $1.99 billion, suggesting a 1.3% decline from the year-ago quarter’s reported figure.
Medical Business
The medical business is expected to have gained from improved U.S. patient traffic to physician offices, ultimate care sites and ambulatory surgical centers. The segment is likely to have witnessed continued demand for medical laboratory equipment and non-COVID point-of-care diagnostic tests, as it did in the previous quarter.
However, sales of personal protective equipment (PPE) products and COVID-19 test kits are likely to have continued the downward rally with declining COVID-19 cases globally in Q4 compared with the year-ago period. Added to this, fourth-quarter sales are expected to have faced a challenging year-over-year comparison when patient traffic to physician offices was bolstered by a surge in Delta variant cases.
Further, Henry Schein earlier expected further pricing declines for gloves in the second half of 2022. We expect all these to have impacted the company’s fourth-quarter revenues.
Meanwhile, in terms of COVID-19 test sales, the company is likely to have witnessed sequentially higher COVID-19 testing demand in Q4, attributable to increased infection rates in several geographies.
The Zacks Consensus Estimate for the company’s fourth-quarter global Medical business revenues is pegged at $1.15 billion, suggesting a rise of 1.3% from the year-ago quarter reported figure.
Technology and Value-Added Services Business
Henry Schein’s technology and value-added services business is likely to have gained from continued strength in Henry Schein One, which provides one of the broadest product offerings of dental practice management and related software and services. The company is expected to have shown strength in its practice management business, including Dentrix practice management software and Dentrix Ascend.
The growth within Henry Schein One in the third quarter was primarily driven by a recovery in patient traffic to dental offices and growth within the company’s cloud-based solutions. Healthy demand from the company’s national DSO accounts for Dentrix Ascend and Dentally cloud-based solutions contributed to the growth. We expect this growth momentum to have continued in Q4, benefiting the business.
As of now, the Zacks Consensus Estimate for the company’s fourth-quarter global Technology and Valued-Added Services business revenues is pegged at $187 million, suggesting an improvement of 5.6% from the year-ago quarter’s reported figure.
The Estimate Picture
For fourth-quarter 2022, the Zacks Consensus Estimate for total revenues of $3.35 billion implies an improvement of 0.7% from the prior-year quarter’s reported figure.
The consensus estimate for earnings per share is pegged at $1.21, indicating an increase of 13.1% from the prior-year quarter’s reported figure.
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 higher chances of beating estimates. This is not the case as you can see:
Earnings ESP: Henry Schein has an Earnings ESP of -1.24%. 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 a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Cardinal Health CAH has an Earnings ESP of +5.75% and a Zacks Rank of #2. The company will release fourth-quarter 2022 results on Feb 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health has a long-term expected earnings growth rate of 11.7%. Cardinal Health’s earnings yield of 6.87% compares favorably with the industry’s 4.34%.
McKesson Corporation MCK has an Earnings ESP of +0.21% and a Zacks Rank of #2. McKesson is scheduled to release third-quarter fiscal 2023 results on Feb 1.
MCK’s long-term historical earnings growth rate is estimated at 10.1%. MCK’s earnings yield of 6.49% compares favorably with the industry’s 4.34%.
Laboratory Corporation of America Holdings or LabCorp LH currently has an Earnings ESP of +2.67% and a Zacks Rank of #2. LabCorp is expected to release fourth-quarter 2022 results on Feb 16.
LabCorp’s long-term historical earnings growth rate is estimated at 26.1%. LabCorp’s earnings yield of 7.02% compares favorably with the industry’s 4.34%.
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