Phibro (PAHC) Reliance on International Sales: What Investors Need to Know

Have you assessed how the international operations of Phibro Animal Health (PAHC) performed in the quarter ended December 2024? For this maker of animal health products and nutritional supplements, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.While analyzing PAHC's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.The company's total revenue for the quarter amounted to $309.3 million, showing rise of 23.8%. We will now explore the breakdown of PAHC's overseas revenue to assess the impact of its international operations. A Look into PAHC's International Revenue StreamsDuring the quarter, Europe, Middle East and Africa contributed $32.59 million in revenue, making up 10.54% of the total revenue. When compared to the consensus estimate of $39.86 million, this meant a surprise of -18.23%. Looking back, Europe, Middle East and Africa contributed $31.13 million, or 11.95%, in the previous quarter, and $29.52 million, or 11.81%, in the same quarter of the previous year.Latin America and Canada generated $72.67 million in revenues for the company in the last quarter, constituting 23.50% of the total. This represented a surprise of -3.45% compared to the $75.27 million projected by Wall Street analysts. Comparatively, in the previous quarter, Latin America and Canada accounted for $71.15 million (27.32%), and in the year-ago quarter, it contributed $65.18 million (26.08%) to the total revenue.Of the total revenue, $19.56 million came from Asia Pacific during the last fiscal quarter, accounting for 6.32%. This represented a surprise of +7.72% as analysts had expected the region to contribute $18.16 million to the total revenue. In comparison, the region contributed $14.61 million, or 5.61%, and $14.76 million, or 5.91%, to total revenue in the previous and year-ago quarters, respectively.Anticipated Revenues in Overseas Markets The current fiscal quarter's total revenue for Phibro, as projected by Wall Street analysts, is expected to reach $306 million, reflecting an increase of 16.3% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Europe, Middle East and Africa is anticipated to contribute 14.1% or $43.25 million, Latin America and Canada 20% or $61.08 million and Asia Pacific 6.8% or $20.7 million.For the full year, the company is projected to achieve a total revenue of $1.08 billion, which signifies a rise of 6.3% from the last year. The share of this revenue from various regions is expected to be: Europe, Middle East and Africa at 14.7% ($158.53 million), Latin America and Canada at 25.8% ($279.06 million) and Asia Pacific at 6.8% ($73.97 million). Key Takeaways Phibro's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.In a world where international interdependencies and geopolitical conflicts are ever-increasing, Wall Street analysts closely monitor these trends for companies having international presence to adjust their earnings forecasts. Of course, there are several other factors, including a company's standing within its home borders, that influence analysts' earnings forecasts.Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.Phibro currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Exploring Recent Trends in Phibro's Stock Price The stock has witnessed an increase of 18.2% over the past month versus the Zacks S&P 500 composite's an increase of 2.1%. In the same interval, the Zacks Medical sector, to which Phibro belongs, has registered an increase of 4.1%. Over the past three months, the company's shares saw a decrease of 3.2%, while the S&P 500 increased by 1.2%. 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