Patterson Companies, Inc. ( PDCO Quick Quote PDCO - Free Report) reported adjusted earnings per share (EPS) of 43 cents in first-quarter fiscal 2022, which surpassed the Zacks Consensus Estimate of 38 cents by 13.2%. The bottom line increased 30.3% from the prior-year quarter. GAAP EPS in the quarter was 35 cents, up 40% from the prior-year quarter. Revenue Details
Net sales in the quarter were $1.61 billion, outpacing the Zacks Consensus Estimate by 9.9%. The top line improved 29.6% year over year.
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 first quarter, dental sales surged 41% year over year to $606.9 million. Dental Consumable Sales in the sub-segment totaled $376.6 million, up 46.8% year over year. Dental Equipment & Software Sales in the segment improved 38.9% on a year-over-year basis to $156.9 million. Value-added Services and Other This segment comprises technical service, parts and labor, software support services and office supplies. Sales at the segment climbed 20.8% on a year-over-year basis to $73.3 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 first quarter, the segment sales increased 23.5% on a year-over-year basis to $1 billion. Corporate Sales at the segment were $5.2 million, which surged 54% from $3.4 million in the year-ago quarter. Margin Analysis
Gross profit in the reported quarter was $277.8 million, up 9.5% year over year. As a percentage of revenues, gross margin of 17.2% contracted 320 basis points (bps) on a year-over-year basis.
Operating expenses in the reported quarter amounted to $317.3 million, up 46.9% from the prior-year quarter. The company reported an operating loss of $39.5 million, against the year-ago quarter’s operating income of $37.9 million. Financial Position
The company exited the fiscal first quarter with cash and cash equivalents of $136.9 million, compared with $143.2 million on a sequential basis.
Net cash used in operating activities at the end of the fiscal first quarter was $313.4 million, noticeably wider than the year-ago quarter’s net cash utilized in operating activities of $229.8 million. Fiscal 2022 Earnings Outlook
Patterson Companies updated its earnings outlook for fiscal 2022. The company now projects adjusted EPS in the range of $1.95 to $2.05 (narrowed from the prior range of $1.90 to $2.05). The Zacks Consensus Estimate for the same is pegged at $2.01 per share.
Patterson Companies ended first-quarter fiscal 2022 on a strong note, wherein both earnings and revenues beat the consensus mark. The company witnessed improved performance across its segments in the quarter under review. Prudent cost savings approach and solid sales execution worked in favor of the stock. Sustained momentum across the Dental and Animal Health businesses, and the company’s solid position in the market got reflected in the fiscal first-quarter results.
A broad spectrum of products cushions the company against economic downturns in the MedTech space. We believe that a diverse product portfolio, strong veterinary business prospects, accretive acquisitions and strategic partnerships are key catalysts. However, contraction in gross margin remains a headwind. Zacks Rank
Patterson Companies carries a Zacks Rank #3 (Hold).
Earnings of Other MedTech Majors at a Glance
Some better-ranked stocks in the broader medical space that have already announced their quarterly results are
Encompass Health Corporation ( EHC Quick Quote EHC - Free Report) , West Pharmaceutical Services, Inc. ( WST Quick Quote WST - Free Report) and Bio-Rad Laboratories, Inc. ( BIO Quick Quote BIO - Free Report) . While both Encompass Health and West Pharmaceutical carry a Zacks Rank of 2 (Buy), Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Encompass Health reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. Bio-Rad reported second-quarter 2021 adjusted EPS of $3.54, surpassing the Zacks Consensus Estimate by 86.3%. Revenues of $715.9 million beat the Zacks Consensus Estimate by 17.3%.