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Patterson Cos. (PDCO) Up 2.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Patterson Cos. (PDCO - Free Report) . Shares have added about 2.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Patterson Cos. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson Companies Q4 Earnings Beat, Revenues Lag
Patterson Companies reported adjusted earnings per share (EPS) of 71 cents in fourth-quarter fiscal 2022, which surpassed the Zacks Consensus Estimate of 56 cents by 26.8%. The bottom line increased a significant 86.8% from the prior-year quarter.
GAAP EPS in the quarter was 65 cents, up 116.7% from the prior-year quarter.
For fiscal 2022, the company reported adjusted EPS of $2.27, up 18.8%. The figure outpaced the consensus mark by 7.1%.
Revenue Details
Net sales in the quarter were $1.64 billion, which lagged the Zacks Consensus Estimate by 1.7%. The top line, however, improved 4.9% year over year.
For fiscal 2022, revenues were $6.49 billion, up 9.9% from the prior fiscal year. The figure beat the consensus mark by 0.3%.
Segmental Analysis
The company currently distributes products through subsidiaries — Patterson Dental and Patterson Animal Health.
Dental Segment
This segment provides a complete range of consumable dental products, equipment, software, turnkey digital solutions and value-added services to dentists and laboratories throughout North America.
In the fiscal fourth quarter, dental sales increased 3.3% year over year to $636.4 million.
Dental Consumable
Sales in the sub-segment totaled $354.3 million, down 0.8% year over year.
Dental Equipment & Software
Sales in the segment rose 14.2% on a year-over-year basis to $208.4 million.
Value-added Services and Other
This segment comprises technical service, parts and labor, software support services and office supplies. Sales at the segment fell 3.2% on a year-over-year basis to $73.8 million.
Animal Health Segment
This segment is a leading distributor of veterinary supplies to clinics, public and private institutions and shelters across the United States.
In the fiscal fourth quarter, the segment sales increased 7.3% on a year-over-year basis to $1.01 billion.
Corporate
Sales at the segment were ($5.5) million, against $6.4 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $348.2 million, up 14.4% year over year. As a percentage of revenues, gross margin of 21.2% expanded 170 basis points (bps) on a year-over-year basis.
Operating expenses in the reported quarter amounted to $275.4 million, up 3.1% from the prior-year quarter.
The company reported an operating income of $72.8 million, surging 95% from the year-ago quarter. As a percentage of revenues, operating margin of 4.4% expanded 200 bps on a year-over-year basis.
Financial Position
The company exited the fiscal fourth quarter with cash and cash equivalents of $142 million, compared with $165 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the fiscal fourth quarter was $980.9 million, noticeably wider than the year-ago quarter’s net cash utilized in operating activities of $730.5 million.
Fiscal 2023 Earnings Outlook
Patterson Companies issued its earnings outlook for fiscal 2023. The company projects adjusted EPS in the range of $2.25 to $2.35. The Zacks Consensus Estimate for the same is pegged at $2.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -14.84% due to these changes.
VGM Scores
At this time, Patterson Cos. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Patterson Cos. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Patterson Cos. (PDCO) Up 2.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Patterson Cos. (PDCO - Free Report) . Shares have added about 2.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Patterson Cos. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson Companies Q4 Earnings Beat, Revenues Lag
Patterson Companies reported adjusted earnings per share (EPS) of 71 cents in fourth-quarter fiscal 2022, which surpassed the Zacks Consensus Estimate of 56 cents by 26.8%. The bottom line increased a significant 86.8% from the prior-year quarter.
GAAP EPS in the quarter was 65 cents, up 116.7% from the prior-year quarter.
For fiscal 2022, the company reported adjusted EPS of $2.27, up 18.8%. The figure outpaced the consensus mark by 7.1%.
Revenue Details
Net sales in the quarter were $1.64 billion, which lagged the Zacks Consensus Estimate by 1.7%. The top line, however, improved 4.9% year over year.
For fiscal 2022, revenues were $6.49 billion, up 9.9% from the prior fiscal year. The figure beat the consensus mark by 0.3%.
Segmental Analysis
The company currently distributes products through subsidiaries — Patterson Dental and Patterson Animal Health.
Dental Segment
This segment provides a complete range of consumable dental products, equipment, software, turnkey digital solutions and value-added services to dentists and laboratories throughout North America.
In the fiscal fourth quarter, dental sales increased 3.3% year over year to $636.4 million.
Dental Consumable
Sales in the sub-segment totaled $354.3 million, down 0.8% year over year.
Dental Equipment & Software
Sales in the segment rose 14.2% on a year-over-year basis to $208.4 million.
Value-added Services and Other
This segment comprises technical service, parts and labor, software support services and office supplies. Sales at the segment fell 3.2% on a year-over-year basis to $73.8 million.
Animal Health Segment
This segment is a leading distributor of veterinary supplies to clinics, public and private institutions and shelters across the United States.
In the fiscal fourth quarter, the segment sales increased 7.3% on a year-over-year basis to $1.01 billion.
Corporate
Sales at the segment were ($5.5) million, against $6.4 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $348.2 million, up 14.4% year over year. As a percentage of revenues, gross margin of 21.2% expanded 170 basis points (bps) on a year-over-year basis.
Operating expenses in the reported quarter amounted to $275.4 million, up 3.1% from the prior-year quarter.
The company reported an operating income of $72.8 million, surging 95% from the year-ago quarter. As a percentage of revenues, operating margin of 4.4% expanded 200 bps on a year-over-year basis.
Financial Position
The company exited the fiscal fourth quarter with cash and cash equivalents of $142 million, compared with $165 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the fiscal fourth quarter was $980.9 million, noticeably wider than the year-ago quarter’s net cash utilized in operating activities of $730.5 million.
Fiscal 2023 Earnings Outlook
Patterson Companies issued its earnings outlook for fiscal 2023. The company projects adjusted EPS in the range of $2.25 to $2.35. The Zacks Consensus Estimate for the same is pegged at $2.25 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -14.84% due to these changes.
VGM Scores
At this time, Patterson Cos. has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Patterson Cos. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.