It has been about a month since the last earnings report for Phibro Animal Health (PAHC). Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Phibro due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Phibro Sees Y/Y Rise in Earnings & Revenues in Q4
Phibro reported adjusted earnings per share (EPS) of 46 cents in the fourth quarter of fiscal 2018, up 17.9% year over year. Adjusted EPS surpassed the Zacks Consensus Estimate of 44 cents.
According to the company, the year-over-year improvement was primarily driven by higher gross profit, reduced interest expenses as well as a drop in effective income tax rate.
Reported EPS of 55 cents was up 44.7% from a year ago.
Full-year adjusted EPS came in at $1.74, up from the year-ago $1.51. Also, the figure beat the Zacks Consensus Estimate of $1.71.
In the reported quarter, net sales totaled $211.8 million, up 8.7% year over year. The improvement was driven by sales growth at the Animal Health, Mineral Nutrition and Performance Products segments.
Fiscal 2018 revenues of $820 million were up 7.3% from the year-ago figure. The figure also surpassed the Zacks Consensus Estimate of $817.2 million.
Sales by Segments
Net sales at the Animal Health segment increased 7% to $137.7 million in the reported quarter on volume increase at Nutritional specialty and Vaccine product groups within the segment. Nutritional specialty products grew less than 1%, principally on volume growth of products for poultry which was largely offset by decreased sales to the dairy sector which is grappling with weak conditions. Further, sales from Vaccines increased 7%, majorly on global volume growth.
Moreover, sales at Medicated feed additives (MFAs) and other grew 9% primarily on strength in international business. International net sales were driven by growth in most regions, including benefits from a recent buyout and additional penetration in the cattle sector. Domestic net sales at MFAs and Other remained flat year over year.
Net sales at the Mineral Nutrition segment rose 14% to $60.3 million on higher average selling prices resulting from an increase in underlying raw material commodity price.
Net sales at the Performance Products segment rose 3% to $13.8 million on higher average selling prices of copper-based products and rising volumes of personal care ingredients. However, this growth was partially offset by reduced volumes of copper-based products.
Phibro’s fourth-quarter gross profit increased 7% year over year to $67.5 million. However, gross margin contracted 50 basis points (bps) to 31.9%.
Selling, general and administrative expenses rose 5% to $41.4 million. However, operating margin expanded 20 bps to 12.3% in the quarter.
Phibro generated $70 million of cash flow from operations in fiscal 2018, down from the year-ago $98.4 million. Capital expenditure amounted to $18.5 million in this period, reflecting a reduction from $20.9 million in the year-ago period.
FY19 View Issued
Phibro has issued its guidance for fiscal 2019. The company expects to generate net sales of $850-$875 million. The current Zacks Consensus Estimate of $851.3 million is within the guided range.
Phibro projects adjusted EPS in the $1.72-$1.77 band. The current Zacks Consensus Estimate of $1.88 is above the company's guided range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
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
Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research