Alcon (ALC) to Report Q2 Earnings: What's in the Cards?
Alcon Inc. ALC is scheduled to report second-quarter 2023 results on Aug 16, before market open.
In the last reported quarter, the company’s earnings per share (EPS) of 70 cents exceeded the Zacks Consensus Estimate by 16.67%. Moreover, its earnings surpassed the consensus estimate in three of the trailing four quarters and were in line with estimates in one. The average earnings surprise was 8.85%.
Let's see how things have shaped up before the announcement.
Factors at Play
Similar to the first quarter of 2023, strong commercial execution, new product launches and demand from resilient markets are expected to have contributed to the top line in the second quarter.
Alcon’s Surgical business is expected to have been boosted by the strength of the company’s CENTURION and LEGION devices. The company noted earlier that customers continue to be pleased with the performance of Centurion with Active Sentry, which enhances safety and confidence during surgery. Further, there remains a sizable installed base of Legacy, Infiniti, Laureate and other machines in the international markets.This is likely to have boosted the company’s Surgical business in this region.
Further, Alcon might have benefitted from the high win rate of Argos Biometer. Results from a real-world study highlight that Argos delivers significant time efficiencies for patients during cataract evaluation. On the first-quarter earnings call, the company noted that it has started rolling out Argos across international markets and customer reception has been positive. This might have contributed to Alcon’s Surgical business in the second quarter.
Alcon Price and EPS Surprise
Alcon price-eps-surprise | Alcon Quote
However, the South Korean market might have faced a tough comparison owing toa change in PCIOL reimbursement in Korea last year, which increased demand during that period.
The Zacks Consensus Estimate for second-quarter 2023 Surgical revenues is pegged at $1.33 billion. This suggests a 2.8% rise from the previous quarter’s reported figure.
Within Alcon’s Vision Care segment, contact lens and ocular health franchises are expected to have contributed to the second-quarter top line.
The company continues to receive favorable market feedback for its portfolio of innovative lenses and is focused on expanding its contact lens offerings. Alcon earlier envisioned its toric lens portfolio to be one of the fastest-growing segments of the contact lens market. Further, the company, on its first-quarter earnings call, particularly talked about the continued strong market uptake of its portfolio of SiHy lenses. This trend should have continued in the second quarter as well.
The ocular health segment is likely to have performed well in the second quarter of 2023, driven by a wide range of SYSTANE preservative-free dry eye relief products, including HYDRATION PF, Ultra and Complete.
However, similar to the first quarter of 2023, we believe Alcon is likely to have met ongoing supply-chain challenges in the to-be-reported quarter, affecting its revenue growth.
Our model estimate for the company’s second-quarter 2023 Vision Care revenues is pegged at $964.6 million. This suggests an improvement of 6.7% from the previous quarter’s reported figure.
The Estimate Picture
For the second quarter of 2023, the Zacks Consensus Estimate for total revenues of $2.34 billion implies an improvement of 6.6% from the prior-year quarter’s figure.
The consensus estimate for EPS is pegged at 62 cents, indicating a fall of 1.6% from the prior-year quarter’s 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 a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP:The company has an Earnings ESP of -0.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ALC currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle:
Patterson Companies PDCO has an Earnings ESP of +5.66% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PDCO has an estimated long-term growth rate of 9.2%.
Patterson Companies’ earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 4.52%.
Definitive Healthcare DH has an Earnings ESP of +55.55% and a Zacks Rank of 3 at present. DH has an estimated long-term growth rate of 18.3%.
Definitive Healthcare’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 33.75%.
National Vision EYE has an Earnings ESP of +8.18% and a Zacks Rank of 3 at present. EYE has an estimated long-term growth rate of 21.9%.
National Vision’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, delivering an average surprise of 69.96%.
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Alcon (ALC) : Free Stock Analysis Report
Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report
Definitive Healthcare Corp. (DH) : Free Stock Analysis Report
