International Markets and Phibro (PAHC): A Deep Dive for Investors

Zacks Equity Research

Tue, May 13, 2025, 7:16 AM 5 min read

Did you analyze how Phibro Animal Health (PAHC) fared in its international operations for the quarter ending March 2025? Given the widespread global presence of this maker of animal health products and nutritional supplements, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Participation in global economies acts as a defense against economic difficulties at home and a pathway to more rapidly developing economies. However, it also comes with the complexities of dealing with fluctuating currencies, geopolitical risks and different market dynamics.

Upon examining PAHC's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter amounted to $347.8 million, showing rise of 32.1%. We will now explore the breakdown of PAHC's overseas revenue to assess the impact of its international operations.

Unveiling Trends in PAHC's International Revenues

Asia Pacific accounted for 8.11% of the company's total revenue during the quarter, translating to $28.22 million. Revenues from this region represented a surprise of +20.43%, with Wall Street analysts collectively expecting $23.44 million. When compared to the preceding quarter and the same quarter in the previous year, Asia Pacific contributed $19.56 million (6.32%) and $17.08 million (6.49%) to the total revenue, respectively.

Latin America and Canada generated $70.75 million in revenues for the company in the last quarter, constituting 20.34% of the total. This represented a surprise of +27.74% compared to the $55.39 million projected by Wall Street analysts. Comparatively, in the previous quarter, Latin America and Canada accounted for $72.67 million (23.50%), and in the year-ago quarter, it contributed $53.65 million (20.38%) to the total revenue.

During the quarter, Europe, Middle East and Africa contributed $38.91 million in revenue, making up 11.19% of the total revenue. When compared to the consensus estimate of $48.03 million, this meant a surprise of -18.99%. Looking back, Europe, Middle East and Africa contributed $32.59 million, or 10.54%, in the previous quarter, and $33.18 million, or 12.60%, in the same quarter of the previous year.

Revenue Projections for Overseas Markets

The current fiscal quarter's total revenue for Phibro, as projected by Wall Street analysts, is expected to reach $359.55 million, reflecting an increase of 31.6% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Asia Pacific is anticipated to contribute 6.4% or $22.9 million, Latin America and Canada 18.6% or $66.93 million and Europe, Middle East and Africa 13.6% or $48.83 million.

Analysts expect the company to report a total annual revenue of $1.28 billion for the full year, marking an increase of 25.9% compared to last year. The expected revenue contributions from Asia Pacific, Latin America and Canada and Europe, Middle East and Africa are projected to be 6.3% ($80.5 million), 20.8% ($266.15 million) and 12.5% ($160.57 million) of the total revenue, in that order.

Wrapping Up

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.

With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these 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.

With an impressive externally audited track record, our proprietary stock rating tool - the Zacks Rank - harnesses the power of earnings estimate revisions and serves as an effective indicator of a stock's near-term price performance.

At present, Phibro holds a Zacks Rank #2 (Buy). This ranking implies that its near-term performance might beat the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Review of Phibro's Recent Stock Market Performance

Over the past month, the stock has gained 36.8% versus the Zacks S&P 500 composite's 9.1% increase. The Zacks Medical sector, of which Phibro is a part, has risen 1.4% over the same period. The company's shares have declined 4.9% over the past three months compared to the S&P 500's 3.1% decline. Over the same period, the sector has declined 8.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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