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

Patterson Companies, Inc. PDCO is expected to release first-quarter fiscal 2023 results on Sep 1, before the opening bell.

The company delivered an earnings surprise of 26.79% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 16.5%.

Q1 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.56 billion, suggesting a decline of 3.3% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 39 cents, indicating a decrease of 9.3% 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 first-quarter fiscal 2023.

Per management, in the fourth quarter of fiscal 2022, sales at this segment inched up 3.3% 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.

With regard to the Animal Health business in the fiscal fourth quarter of 2022, sales in this segment grew 7.3% 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.

Patterson Companies, Inc. Price and Consensus

Patterson Companies, Inc. Price and Consensus
Patterson Companies, Inc. Price and Consensus

Patterson Companies, Inc. price-consensus-chart | Patterson Companies, Inc. Quote

The segment has been gaining from the rise in pet adoptions and increased attention to pets. Per the fourth-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 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.

However, intense competition across most of the product lines and inflationary pressures might have weighed on the company’s overall performance in the fiscal first 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 -4.52%. 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 #2.

Peer Releases

AMN Healthcare Services, Inc. AMN, Bio-Rad Laboratories, Inc. BIO and McKesson MCK are some companies from the broader medical space that have already announced results. You can see the complete list of today's Zacks #1 Rank stocks here.

AMN Healthcare, sporting a Zacks Rank #1, reported second-quarter 2022 adjusted EPS of $3.31, which beat the Zacks Consensus Estimate by 11.8%. Revenues of $1.43 billion outpaced the consensus mark by 4.8%.

AMN Healthcare has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 15.7%.

Bio-Rad, carrying a Zacks Rank #2, reported second-quarter 2022 adjusted EPS of $3.38, which beat the Zacks Consensus Estimate by 37.4%. Revenues of $691.1 million outpaced the consensus mark by 3.9%.

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 46.8%.

McKesson reported second-quarter 2022 adjusted EPS of $5.83, which surpassed the Zacks Consensus Estimate by 9.8%. Revenues of $67.2 billion outpaced the Zacks Consensus Estimate by 5.1%. It currently carries a Zacks Rank #2.

McKesson has an earnings yield of 6.8% compared with the industry’s 4.4% yield. MCK’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 13%.

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


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McKesson Corporation (MCK) : Free Stock Analysis Report
 
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