Patterson Companies, Inc. PDCO is expected to release fiscal fourth-quarter 2023 results on Jun 21, before the opening bell.
The company delivered an earnings surprise of 3.33% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, delivering an average surprise of 6.22%.
For the to-be-reported quarter, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.66 billion, indicating a 1.1% increase from the prior-year period’s reported figure.
The same for adjusted earnings per share is pinned at 70 cents, indicating a 1.4% decline from that recorded in the year-ago quarter.
Factors to Note
As 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. However, COVID-19 is likely to have impacted the company’s Dental business in fiscal fourth-quarter 2023.
Per management, in the third quarter of fiscal 2023, sales at this segment decreased 4.4% year over year. The decline was mainly due to moderation of sales of infection control products, which had witnessed strong demand during the pandemic. Moreover, persistent deflationary impact and unfavorable currency movement also hurt top-line growth in the last reported quarter. However, improved demand for digital equipment portfolio and continued momentum in the core equipment category benefited the segment’s revenues. These trends are likely to have continued in the to-be-reported quarter.
In the fiscal third quarter of 2023, sales in the Animal Health segment increased 2.6% on a year-over-year basis. According to management, this was driven by sales growth in both companion animal and production animal. These trends are expected to have continued in the fiscal fourth quarter, boosting segmental sales.
Patterson Companies, Inc. Price and Consensus
The Animal Health segment has been gaining from growth in pet adoptions and increased attention to pets. On the fiscal third-quarter 2023earnings call the companion animal business continued to show signs of prosperity and expected to gain from the long-term tailwinds of higher pet ownership in the past two years. Consequently, this trend is likely to get reflected in the fiscal fourth-quarter results.
Apart from this, the company expects that the Animal Health business is well poised to drive its top line and, thereby, margins in the near term.
During the fiscal third quarter, the company closed acquisition of all assets of Dairy Tech, expanding Animal Health’s suite of offerings. Patterson Companies did not disclose any financial terms for the deal yet. The impact of the acquisition on fourth-quarter sales is yet to be seen. On its fiscal fourth-quarterearnings call we expect PDCO to provide the details of the deal’s impact while announcing projections for fiscal 2024. Intense competition across most of the product lines and inflationary pressures might have weighed on the company’s overall fiscal fourth-quarter performance.
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 below.
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.
Stocks Worth a Look
HealthEquity HQY has an Earnings ESP of +5.63% and a Zacks Rank of 2 at present. HQY has an estimated revenue growth rate of 13.1% for fiscal 2024.
HealthEquity delivered a trailing four-quarter average earnings surprise of 9.10%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical Systems MMSI has an Earnings ESP of +3.45% and a Zacks Rank #2 at present. MMSI has an estimated earnings growth rate of 7% for 2023.
Merit Medical Systems delivered a trailing four-quarter average earnings surprise of 20.22%.
Alpha Tau Medical DRTS has an Earnings ESP of +4.00% and a Zacks Rank #2 at present. DRTS has an estimated earnings growth rate of 1.9% for 2023.
Alpha Tau Medical’s earnings surpassed estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 40.84%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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