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Patterson Companies Inc. (PDCO - Analyst Report) is set to report its fourth-quarter fiscal 2013 results before the opening bell on Thursday, May 23. Let us see how things are shaping up prior to the announcement.

In the last quarter, the Minn.-based distributor of dental, veterinarian and rehabilitation medical supplies posted adjusted earnings of 52 cents, which was in line with the Zacks Consensus Estimate.  Moderate sales growth was dampened by contraction in operating margin. Moreover, the business failed to take advantage of the tailwind in the dental market due to internal issues.

Factors to Consider this Quarter

Patterson provides a wide range of consumables, equipment and software, and value-added services to its customers. The performance of the veterinary business is crucial for top-line growth, as it is the only segment growing at a healthy double-digit rate. Moreover, the alliance with Sirona Dental Systems (SIRO - Snapshot Report) should bolster Patterson Dental’s leading position in the North American dental distribution business.

However, we are cognizant regarding the ongoing difficulties in the global dental market as well as tough competition from its peers such as Henry Schein (HSIC - Analyst Report). Softness in the medical and the high-margin dental consumables businesses along with internal operational issues are also causes of concern.

Earnings Whispers?

Our proven model does not conclusively show that Patterson is likely to beat earnings estimate this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks Earnings ESP: The Most Accurate Estimate stands at 62 cents, while the Zacks Consensus Estimate is pegged at 62 cents. This comes to a difference of 0.00%.

Zacks Rank #4 (Sell): Patterson’s Zacks Rank #4 (Sell) lowers the predictive power of ESP. The Zacks Rank #4 together with 0.00% earnings ESP makes surprise prediction difficult.

Other Stocks to Consider

Another company from the medical sector you may want to consider as our model shows it has the right ingredients to post an earnings beat this quarter:  

The Cooper Companies Inc. (COO - Analyst Report), Earnings ESP of +2.94% and a Zacks Rank #2 (Buy).

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