Patterson Companies, Inc. ( PDCO Quick Quote PDCO - Free Report) is set to release second-quarter fiscal 2024 results on Nov 29, before the opening bell.
The company met earnings estimates in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met the same once, delivering an average surprise of 8.47%.
For the to-be-reported quarter, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.71 billion, indicating a 4.9% increase from the prior-year period’s level.
The same for adjusted earnings per share stands at 59 cents, indicating a 6.4% decline from that recorded in the year-ago quarter.
Factors to Note
As one of the leading distributors of consumable products and dental technology, Patterson Companies’ Dental arm is a key contributor to its top line.
Per management, in the first quarter of fiscal 2024, sales at this segment increased 1.7% year over year. The improvement was driven by growth in all Dental Consumable and Value-added Services. Strength was seen across core equipment and CAD/CAM categories as well as in technical service, software and e-services.
However, the digital x-ray category reflected cyclic variation. The consumables portfolio of non-infection control products continues to face deflationary impacts for certain products. These trends are likely to have continued in the to-be-reported quarter.
In the first quarter of fiscal 2024, sales in the Animal Health segment increased 5.3% on a year-over-year basis. The Animal Health segment has been gaining from growth in pet adoptions and increased attention to pets.
On its first-quarter fiscal 2024 earnings call, the company stated that the companion animal business continued to show signs of prosperity and is expected to gain from the long-term tailwinds of higher pet ownership in the past two years. Consequently, this trend is likely to get reflected in the fiscal second-quarter results.
Foundation initiatives, including improved mix, exercising expense discipline and leveraging cost structure, are expected to have boosted gross and operating margins during the to-be-reported quarter.
Moreover, software solutions and equipment service sales are likely to have generated additional revenues during the fiscal second quarter. However, intense competition across most of the product lines and inflationary pressures might have weighed on the company’s overall quarterly performance.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for PDCO this time around. 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 below. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate 57 cents per share) and the Zacks Consensus Estimate, is -3.83% for Patterson Companies.
You can uncover the best stocks to buy or sell before they are reported with our
Earnings ESP Filter. Zacks Rank: Patterson Companies currently carries a Zacks Rank #3. Stocks Worth a Look Aldeyra Therapeutics ( ALDX Quick Quote ALDX - Free Report) has an Earnings ESP of +23.71% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ALDX has an estimated earnings growth rate of 19.8% for fiscal 2023. It delivered a trailing four-quarter average earnings surprise of 30.84%.
Centene ( CNC Quick Quote CNC - Free Report) has an Earnings ESP of +1.18% and a Zacks Rank #2 at present. CNC has an estimated earnings growth rate of 12.8% for 2023.
Centene delivered a trailing four-quarter average earnings surprise of 5.62%.
HealthEquity ( HQY Quick Quote HQY - Free Report) has an Earnings ESP of +9.57% and a Zacks Rank #1 at present. HQY has an estimated earnings growth rate of 26.7% for 2023.
HQY’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 13.03%.
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