DJ Covetrus Shares Up After 4Q Results, Guidance
By Michael Dabaie
Covetrus Inc. shares were up 11% to $12.36 in morning trading.
The animal-health technology and services company reported fourth-quarter net sales of $1.01 billion, up from $903 million in the year-ago period. That was above the FactSet consensus forecast for $986.3 million.
The company swung to a loss of 33 cents a share from earnings of 46 cents a year earlier. The primary drivers of the decline in net income were costs tied to the company's spin-off and merger, Covetrus said.
On Feb. 7, 2019, Covetrus became an independent company after a spin-off by Henry Schein of its animal health business and the completion of its acquisition of Vets First Choice.
Adjusted net income was $20 million for the fourth quarter of 2019, compared with $21 million in the prior year period, on a pro forma basis.
The company forecast fiscal 2020 net sales of between $4.025 billion and $4.125 billion, and adjusted earnings before interest, tax, depreciation and amortization of $190 million to $195 million.
Covetrus also said Benjamin Wolin will become the company's president and chief executive, transitioning from the acting role he held since October 2019.
Credit Suisse raised its price target to $13 from $11 and recommends the stock at neutral. In research it said the Covetrus price target moved with the enhanced visibility on the company's longer-term strategy with also a permanent CEO appointment.
"After a tumultuous beginning to life as a public company, Covetrus delivered its second consecutive quarter of relatively solid results, with in-line revenue and adjusted Ebitda ahead of our estimate," Stifel said in a research note.
"We believe the new management team has successfully stabilized results and continues to gain back credibility with the Street. We also believe the story going forward will center on Ebitda growth in 2021 and beyond," Stifel said. It reiterated a hold recommendation.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
March 04, 2020 11:04 ET (16:04 GMT)
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