Yahoo Finance Patterson Companies (PDCO) Q3 Earnings Beat, Sales Hurt by FX
Patterson Companies, Inc. PDCO reported adjusted earnings per share (EPS) of 62 cents for third-quarter fiscal 2023, which beat the Zacks Consensus Estimate of 57 cents by 3.3%. The bottom line increased 13% from the prior-year quarter.
GAAP EPS in the quarter was 55 cents, down 5.2% from the prior-year quarter.
Revenue Details
Net sales in the quarter were $1.60 billion, which lagged the Zacks Consensus Estimate by 1.2%. The top line increased 0.3% year over year. Internal sales, adjusted for the effects of currency translation, were up 1.8% 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 third quarter of 2023, dental sales decreased 4.4% year over year to $621.8 million.
Dental Consumable
Sales in the sub-segment totaled $330.2 million, down 2.1% year over year.
Dental Equipment & Software
Sales in the segment declined 10.3% on a year-over-year basis to $216.4 million.
Value-added Services and Other
This segment comprises technical service, parts and labor, software support services and office supplies. Sales at the segment improved 4% year over year to $75 million.
Patterson Companies, Inc. Price, Consensus and EPS Surprise
Patterson Companies, Inc. price-consensus-eps-surprise-chart | Patterson Companies, Inc. Quote
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 third quarter, the segment sales increased 2.6% on a year-over-year basis to $969.4 million.
Corporate
The segment recorded revenues of $9.7 million compared with $1.2 million in the year-ago quarter.
Margin Analysis
Gross profit in the reported quarter was $343 million, up 1.9% year over year. As a percentage of revenues, the gross margin of 21.4% expanded approximately 32 basis points (bps) on a year-over-year basis.
Operating expenses in the reported quarter amounted to $267 million, down 3.2% from the prior-year quarter.
The company reported an operating income of $75.9 million, up 24.8% from the year-ago quarter.
Financial Position
The company exited the fiscal third quarter with cash and cash equivalents of $147.3 million, compared with $140.3 million on a sequential basis.
Cumulative net cash used in operating activities at the end of the quarter was $728.2 million compared with the year-ago period’s $834.1 million.
Fiscal 2023 Earnings Outlook
Patterson Companies updated its earnings outlook for fiscal 2023. The company projects adjusted EPS in the $2.25-$2.30 range, compared with the prior $2.25-$2.35 range. The Zacks Consensus Estimate for the same is pegged at $2.28 per share.
Our Take
Patterson Companies ended third-quarter fiscal 2023 on a mixed note, wherein earnings beat the consensus mark but revenues missed the same. The company’s Dental segment reflected improvements while the Animal Health segment showed continuous decline in the quarter under review. Sales of 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 AmerisourceBergen ABC, McKesson Corporation MCK and Hologic, Inc. HOLX.
AmerisourceBergen, carrying a Zacks Rank #2 (Buy), reported first-quarter fiscal 2023 adjusted EPS of $2.71, beating the Zacks Consensus Estimate by 3.4%. Revenues of $62.85 billion outpaced the consensus mark by 0.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AmerisourceBergen has a long-term estimated growth rate of 8.7%. ABC’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.47%.
McKesson, carrying a Zacks Rank #2, reported third-quarter fiscal 2023 adjusted EPS of $6.90, beating the Zacks Consensus Estimate by 8.8%. Revenues of $70.49 billion outpaced the consensus mark by 0.02%.
McKesson has a long-term estimated growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average surprise being 3.4%.
Hologic reported first-quarter fiscal 2023 adjusted earnings of $1.07 per share, beating the Zacks Consensus Estimate by 18.9%. Revenues of $1.07 billion surpassed the Zacks Consensus Estimate by 9.5%. It currently sports a Zacks Rank #1.
Hologic has a long-term estimated growth rate of 15.2%. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 30.6%.
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AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
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Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report
