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

Patterson Companies, Inc. PDCO is slated to release fourth-quarter fiscal 2021 results on Jun 23, before the opening bell.

The company delivered an earnings surprise of 13.7% in the last reported quarter. Further, it beat estimates in each of the trailing four quarters, the average surprise being 70.6%.

Q4 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.54 billion, suggesting growth of 19.7% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 53 cents, indicating an improvement of 23.3% 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.

In the fiscal third quarter, dental sales grew 3.6% year over year to $648.9 million owing to around 14% growth in the consumables unit. The solid performance was primarily driven by sustained strong execution by the company’s field sales and operations teams.
Moreover, the robust performance represents the resilient nature and health of the company’s customers and higher demand for infection control products.

Patterson Companies, Inc. Price and EPS Surprise

Patterson Companies, Inc. Price and EPS Surprise

Patterson Companies, Inc. price-eps-surprise | Patterson Companies, Inc. Quote

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

With regard to Animal Health business in the fiscal third quarter, sales at this segment grew 9.4% on a year-over-year basis. According to management, this was attributable to solid internal sales growth of about 21% in its Companion Animal business. Growth in pet ownership and adoptions amid the pandemic resulted in higher spending, veterinary clinic traffic and pet wellness visits that are responsible for solid top-line results at the 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 fourth-quarter results.

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, Patterson Companies’ 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 fourth quarter.

However, intense competition across most of the product lines might 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 #3.

Peer Releases

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Veeva Systems, Inc. VEEV, West Pharmaceutical Services, Inc. WST and Henry Schein, Inc. HSIC, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veeva Systems reported first-quarter fiscal 2022 adjusted earnings per share (EPS) of 91 cents, which surpassed the Zacks Consensus Estimate by 16.7%. Revenues of $433.6 million outpaced the Zacks Consensus Estimate by 5.9%.

West Pharmaceutical reported first-quarter 2021 adjusted EPS of $2.05, outpacing the Zacks Consensus Estimate by 44.4%. Net sales of $670.7 million exceeded the Zacks Consensus Estimate by 9.1%.

Henry Schein reported first-quarter 2021 adjusted EPS of $1.24 beat the Zacks Consensus Estimate by 49.4%. Net sales of $2.92 billion topped the Zacks Consensus Estimate by 3.6%.

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

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