Phibro Animal Health PAHC delivered adjusted earnings per share (EPS) of 35 cents in the first quarter of fiscal 2025 compared with 14 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 52.2%.

Without adjustments, the GAAP EPS in the quarter was 17 cents compared to a loss of 20 cents in the prior-year period.

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

Following the announcement, PAHC shares rose nearly 8% in the after-hours trading yesterday.  

PAHC’s Q1 Net Sales

In the quarter under review, net sales totaled $260.4 million, up 12.6% from the year-ago quarter’s level. However, the figure missed the Zacks Consensus Estimate by 6.3%.

Phibro’s Q1 Segmental Sales

The company conducts its operations via three segments — Animal Health, Mineral Nutrition and Performance Products.

In the first quarter of fiscal 2025, Animal Health’s net sales increased 13.7% to $182.5 million. The figure surpassed our model’s projection of $178.5 million.

Within the segment, net sales of medicated feed additives (MFAs) and others reflected 15% year-over-year growth. This was driven by increased sales of processing aids used in the fermentation industry and higher sales volumes due to increased demand for MFAs in domestic and international regions.

Nutritional specialty product sales increased 6% due to higher sales of microbial and companion animal products.

However, net vaccine sales showed a year-over-year rise of 22% due to an increase in poultry product demand in Latin America and a surge in domestic and international demand.

Phibro Animal Health Corporation Price, Consensus and EPS Surprise

Phibro Animal Health Corporation price-consensus-eps-surprise-chart | Phibro Animal Health Corporation Quote

Net sales in the Mineral Nutrition segment rose 5% year over year to $59.1 million due to an increase in demand for trace minerals. Our model forecast was $56.8 million. 

Net sales in the Performance Products segment rose 27% to $18.8 million due to higher demand for the ingredients used in personal care products. This also surpassed our model’s projection of $15.9 million.

PAHC’s Margin Performance

Phibro’s fiscal first-quarter gross profit rose 23.3% year over year to $83.5 million. The gross margin expanded 280 basis points (bps) to 32.1% despite an 8.1% rise in the cost of goods sold.

Selling, general and administrative expenses in the reported quarter were $65.8 million, down 3.9% from the year-ago quarter’s levels. The operating profit totaled $17.7 million compared to the operating loss of 0.8 million in the same quarter in fiscal 2024. 

PAHC’s Financial Update

The company exited the first quarter of fiscal 2025 with cash and short-term investments of $89.8 million compared with $114.6 million at the end of the fourth quarter of fiscal 2024.

Cumulative net cash provided by operating activities at the end of the first quarter was $12.6 million compared with $16.2 million in the year-ago period.

Phibro’s Updated Fiscal 2025 Guidance

Phibro provided revised guidance for fiscal 2025 on a standalone basis without giving effect to the acquisition of Zoetis’ Medicated Feed Additive portfolio, completed in October 2024.

The company expects net sales to be $1.05 billion (earlier $1.04 billion-$1.09 billion), implying 6% growth (previously 5%). The Zacks Consensus Estimate for the metric is pegged at $1.19 billion.

Adjusted EPS is expected in the range of $1.34-$1.48 (earlier $1.22-$1.37). The revised outlook indicates an 18% improvement compared to the earlier projected 9%. The Zacks Consensus Estimate is pegged at $1.57.

Our Take on PAHC

Phibro closed the first quarter of fiscal 2025 with earnings beating estimates, while revenues were a miss. However, the results reflected impressive top and bottom-line growth, highlighting that the company is operating at full strength. The strong performance of the Vaccines business and the recovery in the Mineral Nutrition and Performance Products businesses aided operationally. The expansion of the gross margin in the quarter also bodes well for the stock.

The company is also focusing on key areas to support its acquisition and pursue the Phibro Forward income growth initiative. Following the acquisition of Zoetis’ MFA product Portfolio, Phibro is well-positioned to grow its existing MFAs & other category and leverage the significant size and scale for the benefit of all other segments.

PAHC’s Zacks Rank & Other Key Picks

Phibro currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks from the broader medical space are Quest Diagnostics DGX, Intuitive Surgical ISRG and Boston Scientific Corporation BSX.

Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30 per share, which surpassed the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DGX’s 2024 earnings are expected to surge 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.3%.

Intuitive Surgical, currently carrying a Zacks Rank #2, posted a third-quarter 2024 EPS of $1.84, beating the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.

ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.9%.

Boston Scientific Corporation, currently carrying a Zacks Rank #2, reported third-quarter 2024 adjusted earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion beat the Zacks Consensus Estimate by 4.5%.

BSX has an estimated 2024 earnings growth rate of 17.6% compared with the industry’s 11.5% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.

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