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Patterson Companies (PDCO) Q4 Earnings Beat, Sales Hurt by FX
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Patterson Companies, Inc. (PDCO - Free Report) reported adjusted earnings per share (EPS) of 84 cents for fiscal fourth-quarter 2023, which beat the Zacks Consensus Estimate of 57 cents by 20%. The bottom line increased 18.3% from the prior-year quarter’s level.
GAAP EPS in the quarter was 77 cents, up 18.5% from that recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.72 billion, which lagged the Zacks Consensus Estimate by 3.6%. The top line increased 5% year over year. Internal sales, adjusted for the effects of currency translation, increased 5.7% from the prior-year quarter’s figure.
Segmental Analysis
The company currently distributes products through its 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 of 2023, dental sales improved 7.4% year over year to $683.5 million.
Dental Consumable
Sales in the sub-segment totaled $353.3 million, down 0.3% from the year-ago quarter’s number.
Dental Equipment & Software
Sales in the segment improved 18.5% on a year-over-year basis to $246.8 million.
Value-added Services and Other
This segment comprises of technical service, parts and labor, software support services and office supplies. Sales improved 13% year over year to $83.4 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 3.2% to $1.03 billion from the prior-year period’s level.
Corporate
The segment recorded revenues of $5.5 million against expenses of $5.5 million in the year-ago quarter.
Patterson Companies, Inc. Price, Consensus and EPS Surprise
Gross profit in the reported quarter was $389.8 million, up 11.9% year over year. As a percentage of revenues, the gross margin of 22.6% expanded approximately 140 basis points (bps) on a year-over-year basis.
Operating expenses amounted to $284.7 million, up 3.4% from the prior-year quarter’s figure.
The company reported an operating income of $105.1 million, up 44.3% from the year-ago quarter’s level.
Financial Position
PDCO exited the fiscal fourth quarter with cash and cash equivalents of $159.7 million compared with $147.3 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the quarter was $754.9 million compared with $981 million in the year-ago period.
Fiscal 2024 Earnings Outlook
Patterson Companies provided its earnings guidance for fiscal 2024. The company projects adjusted EPS in the range of $2.45-$2.55. The Zacks Consensus Estimate for the same is pegged at $2.28.
Our Take
Patterson Companies ended fiscal fourth-quarter 2023 on a strong note, wherein both earnings and revenues beat the consensus mark by a significant margin.
Both the Dental and the Animal Health segment showed signs of improvement. Sales at both the segments were hurt by unfavorable currency movement. A prudent cost-savings approach and solid sales execution worked in favor of the stock, expanding gross margin. Sustained momentum in the Animal Health business bodes well.
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 the key catalysts.
Zacks Rank and Stocks to Consider
Patterson Companies currently carries a Zacks Rank #3 (Hold).
Some other stocks in the medical space that have announced quarterly results are CONMED (CNMD - Free Report) , Dentsply Sirona (XRAY - Free Report) and Merit Medical Systems (MMSI - Free Report) , all carrying a Zacks Rank #2 (Buy).
CONMED has a long-term estimated growth rate of 19.4%. CNMD’s earnings surpassed estimates in two of the trailing four quarters, missed in one quarter and met once, the average negative surprise being 10.54%.
Dentsply Sirona reported first-quarter 2023 adjusted EPS of 39 cents, beating the Zacks Consensus Estimate by 18.18%. Revenues of $978 million outpaced the consensus mark by 5.1%.
Dentsply Sirona has a long-term estimated growth rate of 9.1%. XRAY has an average earnings surprise of 10.47% in the past four quarters.
Merit Medical Systems reported first-quarter 2023 adjusted earnings of 64 cents per share, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%.
Merit Medical Systems has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.22%.
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Patterson Companies (PDCO) Q4 Earnings Beat, Sales Hurt by FX
Patterson Companies, Inc. (PDCO - Free Report) reported adjusted earnings per share (EPS) of 84 cents for fiscal fourth-quarter 2023, which beat the Zacks Consensus Estimate of 57 cents by 20%. The bottom line increased 18.3% from the prior-year quarter’s level.
GAAP EPS in the quarter was 77 cents, up 18.5% from that recorded in the year-ago period.
Revenue Details
Net sales in the quarter were $1.72 billion, which lagged the Zacks Consensus Estimate by 3.6%. The top line increased 5% year over year. Internal sales, adjusted for the effects of currency translation, increased 5.7% from the prior-year quarter’s figure.
Segmental Analysis
The company currently distributes products through its 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 of 2023, dental sales improved 7.4% year over year to $683.5 million.
Dental Consumable
Sales in the sub-segment totaled $353.3 million, down 0.3% from the year-ago quarter’s number.
Dental Equipment & Software
Sales in the segment improved 18.5% on a year-over-year basis to $246.8 million.
Value-added Services and Other
This segment comprises of technical service, parts and labor, software support services and office supplies. Sales improved 13% year over year to $83.4 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 3.2% to $1.03 billion from the prior-year period’s level.
Corporate
The segment recorded revenues of $5.5 million against expenses of $5.5 million in the year-ago quarter.
Patterson Companies, Inc. Price, Consensus and EPS Surprise
Patterson Companies, Inc. price-consensus-eps-surprise-chart | Patterson Companies, Inc. Quote
Margin Analysis
Gross profit in the reported quarter was $389.8 million, up 11.9% year over year. As a percentage of revenues, the gross margin of 22.6% expanded approximately 140 basis points (bps) on a year-over-year basis.
Operating expenses amounted to $284.7 million, up 3.4% from the prior-year quarter’s figure.
The company reported an operating income of $105.1 million, up 44.3% from the year-ago quarter’s level.
Financial Position
PDCO exited the fiscal fourth quarter with cash and cash equivalents of $159.7 million compared with $147.3 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the quarter was $754.9 million compared with $981 million in the year-ago period.
Fiscal 2024 Earnings Outlook
Patterson Companies provided its earnings guidance for fiscal 2024. The company projects adjusted EPS in the range of $2.45-$2.55. The Zacks Consensus Estimate for the same is pegged at $2.28.
Our Take
Patterson Companies ended fiscal fourth-quarter 2023 on a strong note, wherein both earnings and revenues beat the consensus mark by a significant margin.
Both the Dental and the Animal Health segment showed signs of improvement. Sales at both the segments were hurt by unfavorable currency movement. A prudent cost-savings approach and solid sales execution worked in favor of the stock, expanding gross margin. Sustained momentum in the Animal Health business bodes well.
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 the key catalysts.
Zacks Rank and Stocks to Consider
Patterson Companies currently carries a Zacks Rank #3 (Hold).
Some other stocks in the medical space that have announced quarterly results are CONMED (CNMD - Free Report) , Dentsply Sirona (XRAY - Free Report) and Merit Medical Systems (MMSI - Free Report) , all carrying a Zacks Rank #2 (Buy).
CONMED reported first-quarter fiscal 2023 adjusted EPS of 66 cents, beating the Zacks Consensus Estimate by 10.00%. Revenues of $295.5 million outpaced the consensus mark by 10.5%. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CONMED has a long-term estimated growth rate of 19.4%. CNMD’s earnings surpassed estimates in two of the trailing four quarters, missed in one quarter and met once, the average negative surprise being 10.54%.
Dentsply Sirona reported first-quarter 2023 adjusted EPS of 39 cents, beating the Zacks Consensus Estimate by 18.18%. Revenues of $978 million outpaced the consensus mark by 5.1%.
Dentsply Sirona has a long-term estimated growth rate of 9.1%. XRAY has an average earnings surprise of 10.47% in the past four quarters.
Merit Medical Systems reported first-quarter 2023 adjusted earnings of 64 cents per share, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%.
Merit Medical Systems has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.22%.