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What's in Store for Henry Schein (HSIC) in Q2 Earnings?

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Henry Schein, Inc. HSIC is slated to report second-quarter fiscal 2021 results on Aug 3, before market open.

In the last reported quarter, the company’s earnings of $1.24 surpassed the Zacks Consensus Estimate by 49.4%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 49.16%.

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Dental Business

Per Henry Schein’s May 2021 update, there has been gradual reopening of practices and a stable patient traffic globally over the past few months, even in countries with more stringent lockdown rules. This recovery trend is likely to have continued during the fiscal second quarter as well, thus boosting the company’s top line.

The acquisition of majority ownership in Jarvis Analytics in May has strengthened Henry Schein One's goal to be the leading provider of dental analytics solutions and services to the dental market. We believe Jarvis Analytics has made significant contribution to Henry Schein’s fiscal second-quarter revenues.

Further, Henry Schein’s new software module that integrates dental and medical patient records, reflecting an increased interest among health care providers to offer comprehensive services to patients, is expected to have contributed robustly during the second quarter.

Henry Schein, Inc. Price and EPS Surprise

Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. Price and EPS Surprise

Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote

In June 2021, Henry Schein acquired a majority interest in eAssist. The acquisition has enabled Henry Schein to offer best quality solutions to help dental practices operate more efficiently and profitably. We expect eAssist to have contributed to Henry Schein’s fiscal second-quarter revenue growth.

The Zacks Consensus Estimate for fiscal second-quarter global Dental business revenues is pegged at $1.77 billion, suggesting a surge of 88.5% from the year-ago quarter’s reported figure.

Medical Business

Henry Schein’s medical business is again expected to have seen demand for its Personal Protective Equipment (PPE) and COVID-related products amid the pandemic. However, lower pharmaceutical sales related to fewer patient office visits and lower COVID-19 testing demand might have impacted the medical business in the fiscal second quarter.

Over the past few months, the company has been gaining from the increased uptake of telemedicine. In this regard, Medpod and Henry Schein Medical’s (Henry Schein’s U.S. medical business) web-based clinical decision support system VisualDx have gained importance over the past few months amid the pandemic, a trend that most likely continued to contribute to fiscal second-quarter revenues.

The Zacks Consensus Estimate for fiscal second-quarter global Medical business revenues is pegged at $957 million, suggesting an improvement of 54.9% from the year-ago quarter’s reported figure.

Technology and Value-Added Services Business

Similar to the first quarter, the business is expected to have witnessed an uptick in internal sales on the back of Henry Schein One business as well as solid equipment sales growth. However, internationally, segmental revenues are expected to have been impacted by the prolonged lockdown in the U.K., thus impacting fiscal second-quarter revenues.

Product enhancements for Henry Schein One Solutions, including new Dentrix imaging software, tools for processing insurance remittances and calculating payment adjustments, marketing campaign enhancements for the Lighthouse 360 platform and an online booking feature for the Sesame, are expected to have boosted fiscal second-quarter revenues on strong customer adoption.

The Zacks Consensus Estimate for fiscal second-quarter global Technology and Valued-Added Services business revenues is pegged at $147 million, suggesting a rise of 40% from the year-ago quarter’s reported figure.

The Estimate Picture

For second-quarter fiscal 2021, the Zacks Consensus Estimate for total revenues of $2.90 billion implies an improvement of 72.1% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at 94 cents compared to the prior-year period’s break-even earnings per share.

What Our Model Suggests

Our proven model predicts an earnings beat for Henry Schein this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Henry Schein has an Earnings ESP of +0.91%. 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 #2.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

Hill-Rom Holdings, Inc. HRC has an Earnings ESP of +0.56% and a Zacks Rank #2, currently. The stock is slated to release third-quarter fiscal 2021 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Illumina, Inc. ILMN has an Earnings ESP of +2.36% and a Zacks Rank of 2, at present. The stock is slated to release second-quarter 2021 results on Aug 5.

Laboratory Corporation of America Holdings LH has an Earnings ESP of +6.53% and a Zacks Rank of 2, at present. The company is scheduled to release second-quarter 2021 results on Jul 29.


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