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What's in Store for Patterson Companies (PDCO) in Q3 Earnings?

Patterson Companies, Inc. PDCO is expected to release third-quarter fiscal 2023 results on Mar 2, before the opening bell.

The company delivered an earnings surprise of 10.53% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average surprise being 7.88%.

Q3 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for the company’s revenues is pegged at $1.62 billion, indicating a 1.4% increase from the year-ago reported figure.

The Zacks Consensus Estimate for adjusted earnings per share (EPS) stands at 60 cents, indicating a 9.1% increase from the prior-year quarter.

Patterson Companies, Inc. Price and Consensus

Patterson Companies, Inc. Price and Consensus
Patterson Companies, Inc. Price and Consensus

Patterson Companies, Inc. price-consensus-chart | Patterson Companies, Inc. Quote

Factors to Note

As 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. However, COVID-19 might have impacted the company’s Dental business in third-quarter fiscal 2023.

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Per management, in the third quarter of fiscal 2023, sales at this segment increased 1.1% year over year. Improved demand for digital equipment portfolio and continued momentum in the core equipment category drove the segment’s top line. However, persistent deflationary impact of certain infection control products hurt sales during the second quarter. These trends are likely to have continued in the to-be-reported quarter.

In the fiscal second quarter of 2023, sales in the Animal Health segment declined 2.4% on a year-over-year basis. According to management, this was due to decline in production animal sales, staffing shortages and loss of sales due to products going off patent. These trends are likely to have continued in the fiscal third quarter, hurting segmental sales.

The segment has been gaining from rise in pet adoptions and increased attention to pets. On the second-quarter fiscal 2023 earnings call, the Companion Animal business continued to show signs of prosperity and 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 third-quarter results.

Apart from this, the company expects that the Animal Health business is well poised to drive its top line and, thereby, margins in the near term.

During the fiscal third quarter, the company closed acquisition of all assets of Dairy Tech, expanding Patterson Animal Health’s suite of offerings. Although this is unlikely to have any material impact during the fiscal third quarter, PDCO is likely to provide updated outlook for fiscal 2023 and beyond.

However, intense competition across most of the product lines and inflationary pressures might have weighed on the company’s overall fiscal third-quarter performance.

What the Zacks Model Unveils

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 below.

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 has a Zacks Rank #3.

Stocks Worth a Look

EDAP TMS EDAP has an Earnings ESP of +300.00% and a Zacks Rank of 3. EDAP has an estimated revenue growth rate of 14% for 2023.

EDAP TMS’ average earnings surprise in the trailing four quarters was 200.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

SmileDirectClub SDC has an Earnings ESP of +7.77% and a Zacks Rank #2 at present. SDC has an estimated earnings growth rate of 30.8% for fiscal 2023.

SmileDirectClub’s average negative earnings surprise in the trailing four quarters was 1.08%.

Phreesia PHR has an Earnings ESP of +2.98% and a Zacks Rank #2 at present. PHR has an estimated long-term growth rate of 20%.

Phreesia’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.80%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Patterson Companies, Inc. (PDCO) : Free Stock Analysis Report

EDAP TMS S.A. (EDAP) : Free Stock Analysis Report

Phreesia, Inc. (PHR) : Free Stock Analysis Report

SmileDirectClub, Inc. (SDC) : Free Stock Analysis Report

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