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What's in Store for Patterson Companies' (PDCO) Q2 Earnings?

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Patterson Companies, Inc. (PDCO - Free Report) is expected to release second-quarter fiscal 2021 results in the early weeks of December.

The company delivered earnings surprise of 50% in the last reported quarter. Further, it beat estimates in each of the trailing four quarters, the average surprise being 60.4%.

Fiscal Q2 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.43 billion, suggesting growth of 0.6% from the year-ago reported number. The same for adjusted earnings per share (EPS) stands at 38 cents, indicating a decline of 2.6% 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.

The COVID-19 pandemic resulted in the closure of dental practices and very low patient visits, which led to a weakened demand in the first half of the year. However, with the lifting of stay-at-home orders and easing of prior restrictions, dental market has been slowly picking up pace. Consequently, this recovery might get reflected in the Dental segment’s revenues in the to-be-reported quarter.

Patterson Companies, Inc. Price and EPS Surprise

Patterson Companies, Inc. Price and EPS Surprise

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

With regard to Animal Health business, the company witnessed decline in revenues in the fiscal first quarter as a result of the direct impact of the pandemic.

Nonetheless, per management, the company is satisfied with the segment’s performance in the fiscal first quarter despite the disruption. Both the company’s companion animal and production animal businesses have been witnessing rapid recovery and exhibited better-than-expected performance with a promising trend of sequential sales growth during each month of the fiscal first quarter, which continued into August. Consequently, Patterson Companies might witness an improvement in revenues in the to-be-reported quarter.

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, the company’s 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 second quarter.

During the fiscal first quarter of 2020, Patterson Companies introduced a new private label brand named Pivotal, as the company stands to gain from private label brands as they enable it to serve customers with brilliant products at a reasonable price and more attractive margin profile. This positive development might have contributed to the fiscal-second quarter results.

However, intense competition across most of the product lines may have weighed on the company’s overall performance in the to-be-reported quarter.

What Does Our Model Say?

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 carries a Zacks Rank #2.

Peer Releases

Some other top-ranked stocks in the broader medical space that have already announced their quarterly results include Thermo Fisher Scientific Inc. (TMO - Free Report) , Align Technology, Inc. (ALGN - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

AngioDynamics reported first-quarter fiscal 2021 adjusted earnings per share (EPS) of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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