Henry Schein, Inc. (HSIC), a distributor of healthcare products and services, Wednesday reported an increase in profit for the third quarter, benefiting from higher sales and lower interest and income tax expenses. However, on a per share basis earnings missed Street consensus. Further the company revised the full year 2009 earnings outlook and expects fiscal 2010 earnings to be higher than current year.
Quarterly income from continuing operations attributable to the company increased to $94.04 million or $1.03 per share from $67.55 million or $0.74 per share in the previous year. Net income attributable to Henry Schein rose to $96.42 million or $1.05 per share from $67.49 million or $0.74 per share last year. Results for the quarter include foreign tax benefit of $20.84 million, costs related to foreign tax benefit of $1.08 million and other non-recurring income of $1.03 million.
On an adjusted basis, income from continuing operations attributable to the company was $72.91 million or $0.80 per share, compared to $70.59 million or $0.77 per share a year ago.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.82 per share. Analysts estimates typically exclude special items.
Net sales for the quarter increased 0.9% to $1.66 billion from $1.64 billion a year ago. This consists of a 3.1% decline related to foreign currency exchange and a 4% growth in local currencies. Excluding sales of seasonal influenza vaccines, which declined from last year's third quarter, net sales increased 3.7%.
Nine analysts were looking for revenue of $1.64 billion for the quarter.
Dental Group sales of $622 million declined 3%, consisting of a 0.5% decline related to foreign currency exchange and a 2.5% decline in local currencies. Medical Group sales of $411 million declined 3.1%. Excluding sales of seasonal influenza vaccines, Medical Group sales increased 8.6%.
International Group sales of $584 million increased 8.5%, consisting of an 8.4% decline related to foreign currency exchange and 16.9% growth in local currencies. Technology and Value-Added Services Group sales of $43 million increased 5.4% during the quarter, consisting of a 1.9% decline related to foreign currency exchange and 7.3% growth in local currencies.
Interest expense declined to $5.17 million from $9.24 million in the previous year.
Income tax expenses were down at $15.86 million, compared to $34.35 million last year.
For the nine-month period, net income increased to $224.74 million or $2.48 per share from $183.50 million or $2 per share in the same period of the previous year. Income from continuing operations attributable to the company for period was $222.1 million or $2.45 per diluted share, an increase of 20.6% and 22.5%, respectively. Net sales for the period declined 1% to $4.75 billion from $4.80 billion last year.
Looking forward, the company expects fourth quarter earnings to be in the range of $0.89 to $0.91 per share. Analysts' earnings consensus is $0.96 per share in a range of $0.90 to $1.00 per share.
For fiscal 2009, the company now expects earnings between $3.14 to $3.16 per share, excluding the unusual items, while the prior outlook range was $3.11 to $3.26 per share. The company noted that the current guidance for 2009 represents a growth of around 8% from the restated prior year results, excluding charges related to the Lehman Brothers bankruptcy and restructuring costs. Eleven Wall Street analysts expects earnings of $3.23 per share with estimates in the range of $3.16 to $3.28 per share.
Further, the company introduced 2010 financial guidance in range of $3.40 to $3.56 per share, representing growth of 8% to 13% compared with the midpoint of 2009 guidance. Analysts estimates earnings of $3.56 per share with estimates in the range of $3.43 to $3.67 per share.
HSIC is currently trading at $50.51, down 3.48 or 6.59% on a volume of 1.33 billion on the Nasdaq.
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