PSS World Medical Inc. Earnings Cheat Sheet: Fifth straight Quarter of Expanding Margins, Net Income Climbs

PSS World Medical Inc. (NASDAQ:PSSI) reported its results for the second quarter. PSS World Medical is a national distributor of medical products and equipment, pharmaceutical products, healthcare information technology, and billing services to alternate-site healthcare providers.

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PSS World Medical Earnings Cheat Sheet for the Second Quarter

Results: Net income for PSS World Medical Inc. rose to $20 million (37 cents per share) vs. $19.6 million (35 cents per share) in the same quarter a year earlier. This marks a rise of 2.3% from the year earlier quarter.

Revenue: Rose 5.2% to $521.8 million from the year earlier quarter.

Actual vs. Wall St. Expectations: PSSI fell in line with the mean analyst estimate of 37 cents per share. Analysts were expecting revenue of $530 million.

Quoting Management: David M. Bronson, Executive Vice President and Chief Financial Officer, commented, “The Company continued to execute well on our core strategies in the second quarter of fiscal 2012, offsetting very sluggish healthcare system utilization with share gains, operating improvements, and accretive deployment of capital.Second quarter operating margin, earnings per share, and return on committed capital were at or near historic highs, despite revenue growth challenges brought on by ongoing economic headwinds.

Key Stats:

The company has now seen net income rise in four straight quarters. In the first quarter, net income rose 3.2% while the figure climbed 31.4% in the fourth quarter of the last fiscal year and 9.1% in the third quarter of the last fiscal year from the year earlier.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.4 percentage point to 32% from the year earlier quarter. Over that span, margins have grown on average 0.5 percentage point per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 7.3% to $513.7 million in the first quarter. The figure rose 10.6% in the fourth quarter of the last fiscal year from the year earlier and climbed 1.5% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell in line with estimates last quarter after missing forecasts in the previous quarter with net income of 25 cents versus a mean estimate of net income of 28 cents per share.

Looking Forward: The average estimate for the third quarter is steady at 39 cents a share. For the fiscal year, the average estimate has moved down from $1.48 a share to $1.44 over the last ninety days.

Competitors to Watch: Henry Schein, Inc. (NASDAQ:HSIC), Chindex Intl., Inc. (NASDAQ:CHDX), Patterson Companies, Inc. (NASDAQ:PDCO), Owens & Minor, Inc. (NYSE:OMI), Lincare Holdings Inc. (NASDAQ:LNCR), Cardinal Health, Inc. (NYSE:CAH) and AmerisourceBergen Corp. (NYSE:ABC).

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(Source: Xignite Financials)