HSIC Gears Up for Q3 Earnings: Here's What You Need to Know

Henry Schein, Inc. HSIC is scheduled to release third-quarter 2024 results on Nov. 5, before the opening bell.

In the last reported quarter, the company posted adjusted earnings per share (EPS) of $1.23, which beat the Zacks Consensus Estimate by 0.8%. In the trailing four quarters, Henry Schein’s earnings met estimates once, surpassed twice and missed in the other, delivering an average negative surprise of 1.56%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

HSIC’s Q3 Estimates

The Zacks Consensus Estimate for revenues is pegged at $3.24 billion, which suggests an increase of 2.5% from the year-ago reported figure.

The Zacks Consensus Estimate for EPS is pinned at $1.17, which indicates a year-over-year decline of 11.4%.

Estimate Revision Trend Ahead of HSIC’s Q3 Earnings

Estimates for Henry Schein’s third-quarter earnings have remained unchanged at $1.17 per share in the past 30 days.

Let’s see how the healthcare product and service distributor’s developments might influence the upcoming results.

Factors at Play

Health Care Distribution

The company is expected to sustain the recovery momentum from last year’s cybersecurity incident, which mainly affected the dental and medical distribution businesses in North America and Europe. However, a slower-than-anticipated pace of recovery in the last reported quarter might have continued in the to-be-reported quarter as well. 

The dental distribution businesses are expected to have witnessed improving sales trends as the company is focusing on gaining back episodic customers following the cyber incident. 

Dental equipment sales are also likely to have increased in North America. In addition, Henry Schein’s THRIVE Signature program might have contributed to the overall sales growth, driven by an increase in memberships. However, a decrease in sales in France might have adversely  impacted international dental equipment sales. 

Within the dental specialties business in Europe, sales of dental implant products are likely to have grown, backed by broad and highly competitive offerings. Also, in North America, we expect sales growth to have resumed in the third quarter, aided by a new product line — Tapered Pro Conical implant. 

The company’s endodontic business is also anticipated to have grown, driven by small acquisitions made in Latin America. 

In August, Henry Schein acquired abc dental AG, a full-service dental distributor in Switzerland. The acquisition extends Henry Schein's ability to deliver a wider range of solutions and services to customers in Switzerland. 

Additionally, in July, the company opened an 811K-square-foot Southwestern Distribution Center in Fort Worth, TX. This is the largest single building in the company’s global network. We expect these developments to have had a positive impact on the company’s revenues in the to-be-reported quarter.

Henry Schein, Inc. Price and EPS Surprise

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

Technology and Value-Added Services

Similar to the past several quarters, the segment might have continued to be driven by its largest component, Henry Schein One. The customer base for the Dentrix Ascend and Dentally cloud-based solutions is likely to have increased further, having registered more than 25% year-over-year growth in the first quarter. Additionally, the revenue cycle management e-claims and Home Solution businesses are likely to have put up a strong performance. 

On its previous earnings call, the company had mentioned that collaboration between Henry Schein One and its distribution and specialty products businesses should support growth. For instance, Nemotech, the specialty software, is integrated with Dentrix practice management software to provide three-click digital workflow software for implants and orthodontics. This has already been implemented with some of the DSOs and is expected to advance further. Also, the company expanded its solutions offering by pairing Dentrix Detect AI with Curodont — an early caries treatment product. The company has also gained high synergies from its recently launched Reserve with Google. These solutions are expected to have contributed favorably to the company’s third-quarter revenues.

However, lower sales of PPE products and the residual impact of the cyber incident might have hurt Henry Schein’s internally generated local currency sales in the quarter. The Home Solutions business is also expected to have performed well. 

What Our Model Suggests for HSIC

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 a higher chance of beating on earnings, which is the case here.

Earnings ESP: Henry Schein has an Earnings ESP of +0.26%. 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.

Other Stocks Worth a Look

Here are some other medical stocks worth considering, as these, too, have the right combination of elements to post an earnings beat this reporting cycle.

Atea Pharmaceuticals AVIR has an Earnings ESP of +13.13% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to release third-quarter 2024 results soon. AVIR’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 5.23%. 

RadNet RDNT has an Earnings ESP of +20.00% and a Zacks Rank #2 at present. The company is expected to release third-quarter 2024 results shortly.

RDNT’s earnings surpassed estimates in three of the trailing four quarters and met in one, the average surprise being 98.23%. The Zacks Consensus Estimate for EPS implies an increase of 7.14% from the year-ago reported figure.

TransMedics Group TMDX has an Earnings ESP of +26.63% and a Zacks Rank #3 at present. The company is likely to release third-quarter 2024 results on Oct. 28. The Zacks Consensus Estimate for EPS implies a surge of 333.3% from the year-ago reported numbers.

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