U.S. Markets close in 5 hrs 6 mins

What's in Store for Patterson Companies' (PDCO) Q3 Earnings?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Patterson Companies, Inc. PDCO is scheduled to release third-quarter fiscal 2021 results on Mar 3, before the opening bell.

The company delivered an earnings surprise of 65.8% in the last reported quarter. Further, it beat estimates in each of the trailing four quarters, the average surprise being 73.9%.

Q3 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.49 billion, suggesting growth of 2.3% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 51 cents, indicating an improvement of 8.5% 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 second-quarter fiscal 2021, dental sales grew 11.9% on a year-over-year basis as dental practices reopened after widespread shutdown and patients started to return, thereby, driving demand for dentistry, and the company’s broad array of products and value-added services.

Thus, this momentum is likely to have continued in the to-be-reported quarter.

With regard to Animal Health business in the fiscal second quarter, sales at this segment grew 7.8% on a year-over-year basis. According to the company, this was attributable to solid internal sales growth of about 12% in its Companion Animal business. In fact, both the company’s companion animal and production animal businesses are anticipated to have maintained the growth. Consequently, this trend is likely to get reflected in the fiscal third-quarter results.

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

Moreover, 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.

Further, 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.

Additionally, the company’s 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 third quarter.

During first-quarter fiscal 2020, Patterson Companies introduced a new private label brand named Pivotal, as the company aims to capitalize on private label brands as they enable it to serve customers with brilliant products at a reasonable price and more attractive margin profile. This positive development might have contributed to the fiscal-third quarter performance.

However, intense competition across most of the product lines may 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 #4 (Sell).

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Intersect ENT, Inc. XENT has an Earnings ESP of +5.23% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Surface Oncology, Inc. SURF has an Earnings ESP of +115.83% and a Zacks Rank of 2.

HEXO Corp. HEXO has an Earnings ESP of +10.71% and a Zacks Rank of 3.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Intersect ENT, Inc. (XENT) : Free Stock Analysis Report

Surface Oncology, Inc. (SURF) : Free Stock Analysis Report

HEXO Corp. (HEXO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research