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What's in Store for Patterson Companies' (PDCO) Q4 Earnings?

Zacks Equity Research
·4-min read

Patterson Companies, Inc. PDCO is expected to release fourth-quarter fiscal 2022 results in the last weeks of June, before the opening bell.

The company delivered an earnings surprise of 10% 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 2.7%.

Q4 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.61 billion, suggesting growth of 3.2% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 56 cents, indicating a rise of 47.4% 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. However, it is worth mentioning that the COVID-19 resurgence might have impacted the company’s Dental business in fourth-quarter fiscal 2022.

Per management, in the third quarter of fiscal 2022, sales at this segment inched up 0.3% year over year. Throughout the Dental segment, the company’s field sales, service and support teams remain committed to delivering value to its customers and business partners, thereby driving solid operational excellence. This trend 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

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With regard to the Animal Health business in the fiscal third quarter of 2022, sales at this segment grew 5.6% on a year-over-year basis. According to management, this was attributable to solid internal sales growth and an increase in internal sales in the Companion Animal business as well as the production animal business.

The segment has been gaining from the rise in pet adoptions and increased attention to pets. Per the third-quarter fiscal 2022 earnings call, the Companion Animal business continues to show signs of prosperity and is poised 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 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.

However, intense competition across most of the product lines might have weighed on the company’s overall performance in the fiscal fourth 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 announced quarterly results are Bio-Rad Laboratories, Inc. BIO, AMN Healthcare Services, Inc. AMN and Masimo Corporation MASI.

Bio-Rad, carrying a Zacks Rank #2, reported first-quarter 2022 adjusted EPS of $4.94, which beat the Zacks Consensus Estimate by 76.4%. Revenues of $700 million outpaced the consensus mark by 3.3%. You can see the complete list of today's Zacks #1 Rank stocks here.

Bio-Rad has a historical earnings growth rate of 31.2%. BIO’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 58.9%.

AMN Healthcare, sporting a Zacks Rank #1, reported first-quarter 2022 adjusted EPS of $3.49, which beat the Zacks Consensus Estimate by 7.4%. Revenues of $1.55 billion outpaced the consensus mark by 3.7%.

AMN Healthcare has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 15.6%.

Masimo reported first-quarter 2022 adjusted EPS of 93 cents, which surpassed the Zacks Consensus Estimate by 1.1%. Revenues of $304.2 million outpaced the Zacks Consensus Estimate by 3.6%. It currently carries a Zacks Rank #2.

Masimo has an earnings yield of 3.4% against the industry’s negative yield. MASI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 4.4%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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