Phibro Q3 Earnings Top Estimates, Stock Up, 2025 EPS Outlook Raised

Core Viewpoint - Phibro Animal Health (PAHC) reported strong adjusted earnings per share (EPS) for Q3 fiscal 2025, significantly exceeding the previous year's performance, although revenue slightly missed expectations [1][2][10]. Financial Performance - Adjusted EPS for Q3 was 63 cents, up from 31 cents year-over-year, beating the Zacks Consensus Estimate by 21.1% [1] - GAAP EPS was 51 cents compared to 21 cents in the prior-year period [1] - Net sales reached $347.8 million, a 23.8% increase from the previous year, but fell short of the Zacks Consensus Estimate by 0.7% [2] Segment Performance - Animal Health segment net sales increased by 42% to $258.4 million, although it was below the projected $262.2 million [3] - Medicated feed additives (MFAs) and other products saw a 68% year-over-year growth, contributing $77 million from the Zoetis MFA portfolio acquisition [4] - Mineral Nutrition segment sales rose 4% to $66.8 million, while Performance Products segment sales increased by 28% to $22.7 million, surpassing projections [5] Margin Analysis - Gross profit for Q3 increased by 31.3% to $104.5 million, with a gross margin of 30.1%, down 20 basis points year-over-year [6] - Operating profit rose 67.8% to $33.4 million, with an operating margin expansion of 204 basis points to 9.6% [6] Cash Position - At the end of Q3, the company had cash and short-term investments of $70.4 million, up from $67.1 million at the end of Q2 [7] - Cumulative net cash from operating activities was $58.9 million, slightly down from $59.2 million year-over-year [7] Guidance Update - For fiscal 2025, PAHC expects net sales between $1.26 billion and $1.29 billion, indicating a 25% growth, with adjusted EPS projected between $1.96 and $2.09 [9] - The revised guidance reflects a 70% improvement compared to earlier projections [9] Overall Assessment - The company achieved an earnings beat but a revenue miss in Q3, with strong growth driven by the Animal Health segment and successful integration of the Zoetis MFA business [10] - The outlook for fiscal 2025 remains positive despite some margin contraction and challenges in product sales timing [10][11]