Patterson Companies (PDCO) Earnings Miss Estimates In Q2

Patterson Companies Inc. (NASDAQ:PDCO) reported second-quarter fiscal 2017 adjusted earnings of 56 cents per share from continuing operations, which came in below the Zacks Consensus Estimate of 61 cents. The figure however remains unchanged from the year-ago quarter.

Quarter Details

Net sales from continuing operations increased 2.1% (4.1% at constant exchange rate or CER) year over year to $1,418.2 million but missed the Zacks Consensus Estimate of $1,435.0 million.

Coming to the Animal Health platform (57% of total sales), sales increased almost 4.2% on a year-over-year basis to $807.1 million on the back of a 4.4% rise in consumable products’ sales. Sales of equipment and software climbed 9.9% year over year. However, the other services and products on this platform witnessed a 16% year-over-year decline in sales.

Patterson Companies’ Dental platform (43% of total sales) saw flat year-over-year sales of $601.6 million approximately. Also, sales were flat year over year at CER. Consumable sales at the Dental platform dropped 2.5% year over year to $324.2 million, while sales from other services and products increased only marginally by 0.2%. Sales from dental equipment and software rose 4.2%.

Financial Condition

Cash and cash equivalents were $110.4 million as of Oct 29, 2016 versus $137.5 million as of Apr 30, 2016. In the reported quarter, Patterson repurchased approximately 0.5 million shares for $25.0 million and disbursed $23.5 million in cash dividends to shareholders. This leaves approximately 15 million shares for repurchase under the current authorization, which expires in Mar 2018.

Outlook

Patterson Companies affirmed its adjusted earnings in the range of $2.25–$2.35 per share for fiscal 2017.

Zacks Rank & Key Picks

Patterson Companies currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical sector are Cogentix Medical, Inc. (NASDAQ:CGNT) , CryoLife Inc. (NYSE:CRY) and IDEXX Laboratories, Inc. (NASDAQ:IDXX) . Notably, IDEXX Laboratories and Cogentix sport a Zacks Rank #1 (Strong Buy) while CryoLife has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cogentix Medical registered a positive earnings surprise of 100% in the last reported quarter. Notably, the company has a solid one-year return of roughly 56.6%.

CryoLife has a stellar one-year return of roughly 88.8%. In the last reported quarter, the company registered an impressive earnings surprise of 225%.

IDEXX Laboratories represents a solid one-year return of almost 71.6%. The company has a long-term expected growth rate of almost 14.96%.

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