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

Patterson Companies Inc.PDCO is set to report fiscal third-quarter 2017 results on Feb 23, before the opening bell.

Patterson Companies does not have an impressive track of beating estimates in the trailing four quarters. In the last reported quarter, it recorded a negative earnings surprise of 8.20%, bringing the four-quarter average to a negative 1.35%. Over the past three months, Patterson Companies lost almost 7.22%, in sharp contrast to the Zacks categorized Medical Instruments sub-industry's gain of roughly 7.05%. Let's see how things are shaping up prior to this announcement.

Factors at Play

We believe a growing and diversified product portfolio, strong veterinary business prospects, accretive acquisitions and strategic partnerships are the key catalysts for the company in the fiscal third quarter. Exclusively, the partnership of Patterson Companies with Sirona in bringing high-tech CEREC units to dental groups registered with American Dental Partners is likely to help the company gain market traction.

We are also highly optimistic about the lucrative opportunities in the companion-animal and production-animal segments. The company is expected to primarily benefit from improving end markets, which would drive top-line growth in the fiscal third quarter.

On the flip side, with Patterson Companies recording a significant percentage of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movement has been a major dampener for the company over the last few quarters and the fiscal third quarter is unlikely to be an exception.

Also, overall activities of Patterson Companies during the third quarter were inadequate to win analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter to be reported fell 14 cents to 57 cents per share in the last 90 days.

Earnings Whispers

However, our proven model does not conclusively show that Patterson Companies is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Patterson Companies currently has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 57 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Patterson Companies, Inc. Price and EPS Surprise

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

Zacks Rank: Patterson Companies currently carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few stocks worth considering that, as per our model, have the right combination of elements to post an earnings beat:

Masimo CorporationMASI has an Earnings ESP of +3.51% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

Exelixis, Inc.EXEL has an Earnings ESP of +200.00% and a Zacks Rank #2.

Zynerba Pharmaceuticals, Inc.ZYNE has an Earnings ESP of +2.74% and a Zacks Rank #2.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks - absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks 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

Masimo Corporation (MASI): Free Stock Analysis Report

Exelixis, Inc. (EXEL): Free Stock Analysis Report

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

Zynerba Pharmaceuticals, Inc. (ZYNE): Free Stock Analysis Report

To read this article on click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics

Earnings Stocks

Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More