Henry Schein, Inc. HSIC is scheduled to report first-quarter 2022 results on May 3, before market open.
In the last-reported quarter, the company's earnings of $1.07 surpassed the Zacks Consensus Estimate by 18.9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, the average beat being 25.54%.
Let's see how things have shaped up prior to this announcement.
Factors to Note
Dental Business
Per Henry Schein's fourth-quarter 2021 earnings update, the company has been witnessing robust demand in the global dental market on steady improvement in in-patient traffic with the reopening of the economy over the past few months. The American Dental Association's latest data shows that in the United States, patient traffic is currently at about 90% of the pre-pandemic level. This recovery trend is likely to have continued through the entire first quarter, thus boosting the company's top line.
We believe the launch of Studio Pro 4.0 (in December 2021), a new web-based treatment planning software for Reveal Clear Aligners, has contributed significantly to the company's revenues in the to-be-reported quarter on strong customer adoption.
Further, in March 2022, Henry Schein One expanded its data analytics solution to help private dental practices drive business growth. The company launched a new version of its market-leading dental analytics platform for dental service organizations (DSOs), Jarvis Analytics, now available for private practices. This development is expected to have contributed to the company's top line in the first quarter.
The Zacks Consensus Estimate for the company's first-quarter global Dental business revenues is pegged at $1.88 billion, suggesting a rise of 5.3% from the year-ago quarter's reported figure.
Medical Business
In December 2021, Henry Schein signed a cooperative contract with OMNIA Partners -- one of the nation's largest purchasing organizations for public and private sector procurement that will expand access to point-of-care diagnostic testing, personal protective equipment (PPE), and medical products and supplies in academic and public health settings. In connection with the contract, Henry Schein Medical entered into a master agreement with the University of California to distribute medical supplies to the University of California and all eligible public agencies registered with OMNIA Partners. These developments are likely to have contributed to the company's medical business revenue growth in the first quarter.
Henry Schein, Inc. Price and EPS Surprise
Henry Schein, Inc. price-eps-surprise | Henry Schein, Inc. Quote
However, in terms of COVID-19 test sales, Henry Schein is likely to have witnessed lower COVID-19 testing demand through the first quarter due to a drop in COVID-19 cases globally. We expect this decrease in demand to have impacted the company's first-quarter revenues.
The Zacks Consensus Estimate for the company's first-quarter global Medical business revenues is pegged at $1.03 billion, suggesting a rise of 3.7% from the year-ago quarter figure.
Technology and Value-Added Services Business
During the fourth-quarter earnings update, Henry Schein noted that the company is focused on developing cloud-based solutions to create flexible, scalable services to drive practice efficiency and patient engagement and moving to a SaaS model. This is expected to have driven the company's revenues in the to-be-reported quarter. Moreover, Ascend, the company's cloud-based practice management system with more than 4,000 customers globally, is likely to have contributed significantly to the top line.
During the last-reported fourth quarter, Henry Schein noted that its Dentrix Ascend Cloud solution is now a subscription-based software and is witnessing huge adoption with more than 4,000 customers globally. We believe Henry Schein has witnessed strong customer adoption through the first quarter, thus boosting the top line.
As of now, the Zacks Consensus Estimate for the company's first-quarter global Technology and Valued-Added Services business revenues is pegged at $161 million, suggesting an improvement of 12.6% from the year-ago quarter's reported figure.
The Estimate Picture
For first-quarter 2022, the Zacks Consensus Estimate for total revenues of $3.13 billion implies an improvement of 7.1% from the prior-year quarter's reported figure.
The consensus estimate for earnings per share is pegged at $1.21, indicating a decline of 2.4% from the prior-year quarter's reported 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 higher chances of beating estimates. However, this is not the case here, as you can see:
Earnings ESP: Henry Schein has an Earnings ESP of 0.00%. 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 #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
Computer Programs and Systems CPSI has an Earnings ESP of +1.52% and a Zacks Rank of #1. Computer Programs and Systems will release first-quarter 2022 results on May 3. You can see the complete list of today's Zacks #1 Rank stocks here.
Computer Programs and Systems' long-term earnings growth rate is estimated at 14%. CPSI's earnings yield of 8.47% compares favorably with the industry's (7.51%).
Alcon Inc. ALC has an Earnings ESP of +10.04% and a Zacks Rank of #2. Alcon is expected to release first-quarter 2022 results on May 3.
Alcon's long-term earnings growth rate is estimated at 14.7%. ALC's earnings yield of 3.08% compares with the industry's (7.01%).
Meridian Bioscience, Inc. VIVO has an Earnings ESP of +26.32% and a Zacks Rank of #2. Meridian Bioscience is scheduled to release second-quarter fiscal 2022 results on May 6.
Meridian Bioscience's long-term historical earnings growth rate is 16.3%. VIVO's earnings yield of 5.23% compares favorably with the industry's 0.89%.
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