Phibro (PAHC) Q1 Earnings Miss Estimates, Sales Surpass
Phibro Animal Health’s PAHC adjusted earnings per share (EPS) of 21 cents for the first quarter of fiscal 2023 reflected an 18% increase from the year-ago adjusted figure. However, the metric lagged the Zacks Consensus Estimate by 19.2%.
Meanwhile, without adjustments, GAAP EPS for the fiscal first quarter was 10 cents, down 41% from the year-ago figure.
Net Sales
In the quarter under review, net sales totaled $232.5 million, up 8% from the year-ago quarter. The figure beat the Zacks Consensus Estimate by 3.7%.
Segmental Sales Break-Up
In the fiscal first quarter, Animal Health’s net sales increased 10% to $154.9 million. Within the segment, sales of medicated feed additives (MFAs) and others reflected 11% year-over-year growth. The uptick was driven by increased sales of processing aids used in the ethanol fermentation industry.
Within Animal Health, nutritional specialty product sales rose 8%, primarily banking on higher demand for dairy products. Apart from this, net vaccine sales showed a year-over-year rise of 8% on increased domestic demand.
Phibro Animal Health Corporation Price, Consensus and EPS Surprise
Phibro Animal Health Corporation price-consensus-eps-surprise-chart | Phibro Animal Health Corporation Quote
Net sales in the Mineral Nutrition segment rose 10% year over year to $59.6 million on the increase in average selling prices of trace minerals. This is linked to the movement of the underlying raw material costs.
Net sales in the Performance Products segment dropped 6% to $18 million. In the quarter, lower demand for copper-based products was partially offset by higher volumes of ingredients for personal care products and higher average selling prices of copper-based products.
Margins
Phibro’s fiscal first-quarter gross profit rose 6% year over year to $68.6 million. However, the gross margin contracted 63 basis points (bps) to 29.5% on a 9.3% rise in the cost of goods sold to $163.9 million.
Selling, general and administrative expenses in the reported quarter were $55.5 million, up 9.8% from the year-ago quarter.
Operating profit declined 6.8% year over year to $13.6 million and operating margin contracted 95 bps to 5.8% in the quarter under review.
Financial Update
The company exited the fiscal first quarter with cash and short-term investments of $86 million compared with $91 million at the end of fourth-quarter fiscal 2022.
Cumulative net cash used in operating activities at the end of the first quarter was $10.7 million compared with $3.8 million of operating cash inflow a year ago.
Cumulative capital expenditure amounted to $23.2 million at the end of the first quarter of fiscal 2022 compared with $7.4 million in the year-ago quarter.
Guidance
Phibro reiterated its revenue guidance for fiscal 2023. The company expects net sales between $960 million and $1 billion for fiscal 2023. The Zacks Consensus Estimate for the metric is pegged at $981.67 million.
Adjusted EPS is now expected to be in the range of $1.21 - $1.31 (down from the earlier range of $1.28-$1.38). The Zacks Consensus Estimate for the same is pegged at $1.31.
Our Take
Phibro exited first-quarter fiscal 2022 with better-than-expected revenues. Robust performances across Animal Health and Mineral Health segments are encouraging. The growing uptake of MFAs, dairy products and vaccines buoys optimism.
On the flip side, the company’s earnings missed the consensus mark. The Performance Products segment reported a year-over-year decline. The contraction in the gross and operating margins on mounting costs and expenses is concerning. The company has reduced its full-year EPS guidance indicating the gloomy scenario to persist.
Zacks Rank and Key Picks
Phibro currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are ShockWave Medical SWAV, AMN Healthcare Services AMN and McKesson MCK, all carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ShockWave Medical’s earnings per share is stable at $2.57 for 2022 and rose from $3.42 to $3.56 for 2023 in the past 60 days. SWAV has gained 43.1% so far this year.
ShockWave Medical delivered an earnings surprise of 146.1%, on average, in the last four quarters.
Estimates for AMN Healthcare Services have improved from earnings of $11.26 to $11.43 for 2022 and $8.30 to $8.39 for 2023 in the past 60 days. AMN has declined 1.6% so far this year.
AMN Healthcare Services delivered an earnings surprise of 10.96%, on average, in the last four quarters.
McKesson’s earnings per share estimates have increased from $24.42 to $24.75 for fiscal 2023 and $26.04 to $26.40 for fiscal 2024 in the past 60 days. MCK has gained 55.2% so far this year.
McKesson delivered an earnings surprise of 4.79%, on average, in the last four quarters.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
McKesson Corporation (MCK) : Free Stock Analysis Report
AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
