Henry Schein (NSDQ:HSIC) shares got a boost today on first-quarter results that topped the consensus forecast as medical sales boomed.
The Melville, N.Y.-based company posted profits of $130.3 million, or 91¢ per share, on sales of $2.4 billion for the three months ended March 28, 2020, for an 18.7% bottom-line gain on sales growth of 2.9%.
Adjusted to exclude one-time items, earnings per share were 94¢, 21¢ ahead of Wall Street, where analysts were looking for sales of $2.3 billion.
Henry Schein’s dental business took a 4.6% hit as COVID-19 pandemic is leading to the closures of dental practices except for emergency procedures. However, the company’s $800.7 million total in medical sales represented 17.1% growth year over year.
The company also implemented a payroll cost reduction plan with furloughs, reduced work hours, voluntary unpaid time off, suspension of the 401(k) match, and job reductions. Meanwhile, executives took pay cuts ranging from 10% to 100%, according to a news release.
“Due to the speed and severity of the COVID-19 health care and related economic crisis, this is one of the most trying moments in modern history for everyone,” Henry Schein chairman & CEO Stanley Bergman said in the news release. “We took swift and decisive action to reduce our cost structure to best position Henry Schein through this crisis and beyond. I have the utmost confidence in our business strategy, in our leadership team and in all of team Schein. Together we are making critical decisions to manage the company in the interest of all constituents – team Schein, customers, suppliers, investors and society – and in doing so, we are building value for the long-term.”
Henry Schein withdrew its 2020 financial guidance last month amid uncertainties caused by the COVID-19 pandemic.
HSIC shares were up 5.8% at $55.55 per share in early-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up 1.4%.
