U.S. Markets close in 2 hrs 43 mins

Phirbo (PAHC) Q1 Earnings Lag Estimates, Revenue View Up

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • PAHC
  • WST
  • TMO

Phibro Animal Health Corporation’s PAHC adjusted earnings per share (EPS) of 25 cents for the first quarter of fiscal 2022 reflected a 7.4% decline from the year-ago adjusted figure. The metric missed the Zacks Consensus Estimate by 10.7%

Meanwhile, without adjustments, GAAP EPS for the first quarter was 16 cents, plunging 47% from the year-ago figure.

Net Sales

In the quarter under review, net sales totaled $214.7 million, up 10% from the year-ago quarter.

During the fiscal first quarter, Animal Health net sales increased 10% to $141 million. Within this segment, sales of medicated feed additives (MFAs) and others were $83.8 million, reflecting 6% year-over-year growth, driven by higher international demand, primarily poultry and cattle products in Latin America and Southeast Asia regions. However, this was partially offset by the timing of certain domestic and other international customer orders.

Within Animal Health, nutritional specialty product sales rose 10% to $36 million, primarily on international demand in dairy products.

Apart from this, net vaccine sales totaled $21.2 million, showing a rise of 25% year over year on growth across all major markets but primarily stronger demand in Eastern Europe and India.

Net sales at the Mineral Nutrition segment rose 6% year over year to $54.4 million on higher average selling prices, partially offset by lower volumes.

Phibro Animal Health Corporation Price, Consensus and EPS Surprise

Phibro Animal Health Corporation Price, Consensus and EPS Surprise
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 at the Performance Products segment rose 25% to $19.2 million, driven by strong demand for copper-based products along with increased selling pricing correlated to underlying raw material costs.

Margins

Phibro’s fiscal first-quarter gross profit rose 0.9% year over year to $64.7 million. Gross margin contracted 270 basis points (bps) to 30.1%.

Selling, general and administrative expenses in the reported quarter were $50.1 million, up 3.5% from the year-ago quarter.

Operating profit fell 7% year over year to $14.6 million and operating margin contracted 124 bps to 6.8% in the quarter under review.

Financial Update

The company exited the fiscal first quarter with cash and short-term investments in hand of $97 million compared with $93 million at the end of fourth-quarter fiscal 2021.

Cumulative net cash used in operating activities at the end of the first quarter was $20.7 million compared with $13.6 million a year ago.

Cumulative capital expenditure amounted to $7.4 million at the end of the first quarter of fiscal 2021, unchanged from the year-ago figure.

Outlook

Phibro has updated its fiscal 2022 financial guidance.

The company projects net sales for fiscal 2022 in the range of $860.0-$890.0 million, an improvement from the earlier-provided band of $840-$870 million.

Adjusted EPS was reiterated in the band of $1.25-$1.32. The Zacks Consensus Estimate for the metric is pegged at $1.34.

Our Take

Phibro’s first-quarter fiscal 2022 earnings missed the Zacks Consensus Estimate. Revenues though up year over year, declined sequentially. The year-over-year increase was primarily due to stronger international demand for poultry and cattle products and stronger growth in the nutritional specialties and vaccine product lines. The company has raised its revenue forecast for fiscal 2022 on improving business trends.

On the flip side, escalating expenses and contraction of both margins do not bode well.

Zacks Rank and Key Picks

The company currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Thermo Fisher Scientific Inc. TMO, SARTORIUS SARTF and West Pharmaceutical Services, Inc. WST.

Thermo Fisher, carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the consensus mark by 12%. You can see the complete list of today’s Zacks #1 Rank stocks here.

SARTORIUS reported third-quarter 2021 adjusted EPS of $2.55, surpassing the Zacks Consensus Estimate by 7.6%. Revenues of $1.06 billion surpassed the Zacks Consensus Estimate by 5.2%. It currently carries a Zacks Rank #2 (Buy).

West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. It currently carries a Zacks Rank #2.


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

Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report

West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report

Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report

SARTORIUS (SARTF) : Free Stock Analysis Report

To read this article on Zacks.com click here.