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What's in Store for Patterson Companies' (PDCO) Q1 Earnings?

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·4 min read
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Patterson Companies, Inc. PDCO is expected to release first-quarter fiscal 2022 results on Sep 2, before the opening bell.

The company delivered a negative earnings surprise of 28.3% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 25.3%.

Q1 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.45 billion, suggesting growth of 16.2% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 37 cents, indicating an improvement of 12.1% from the prior-year quarter.

Factors to Note

Being one of the leading distributors of consumable products and dental technology, Patterson Companies’ Dental arm has been one of the key contributors to its top line.

In the fiscal fourth quarter of 2021, dental sales surged 50.4% year over year to $616 million driven by better-than-expected growth in consumables, equipment and software and value-added service categories. Uptick in internal sales included robust growth in consumables, and equipment and software. Thus, this momentum is likely to have continued in the to-be-reported quarter.

Patterson Companies, Inc. Price and EPS Surprise

Patterson Companies, Inc. Price and EPS Surprise
Patterson Companies, Inc. Price and EPS Surprise

Patterson Companies, Inc. price-eps-surprise | Patterson Companies, Inc. Quote

With regard to Animal Health business in the fiscal fourth quarter, sales at this segment grew 10.1% on a year-over-year basis. According to management, this was attributable to solid internal sales growth of about 17% in its Companion Animal business. Growth in pet ownership and adoptions amid the pandemic resulted in higher spending, veterinary clinic traffic and pet wellness visits, which are primarily responsible for solid top-line results at the Companion Animal business.

The segment is likely to have benefited from the recently closed buyout of Miller Vet as this transaction may have expanded the company’s core sales reach and driven synergies.

In fact, both the company’s companion animal and production animal businesses are anticipated to have maintained growth. Consequently, this trend is likely to get reflected in the fiscal first-quarter results.

Apart from this, the company is of the opinion that the Animal Health business is well-poised to drive the top line and thereby, margins in the near term.

Robust demand for the segment’s products like x-ray film, restorative materials, sterilization products, hand instruments and advanced dental equipment may have contributed to the company’s performance in the quarter to be reported.

Patterson Companies’ focused and disciplined approach to boost execution and fortify its value proposition is likely to have favored the top line and margin expansion in the fiscal first quarter.
However, intense competition across most of the product lines might have weighed on the company’s overall performance in the to-be-reported quarter.

What the Zacks Model Unveils

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.

Earnings ESP: Patterson Companies has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company currently has a Zacks Rank #3.

Peer Releases

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Encompass Health Corporation EHC, West Pharmaceutical Services, Inc. WST and Bio-Rad Laboratories, Inc. BIO. While West Pharmaceutical sports a Zacks Rank #1, both Encompass Health and Bio-Rad Laboratories carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encompass Health reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%.

Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million beat the Zacks Consensus Estimate by 17.3%.


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Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report

BioRad Laboratories, Inc. (BIO) : Free Stock Analysis Report

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