Shares of Patterson Companies (PDCO +0.00%) were plunging 15.1% as of 11:09 a.m. ET on Wednesday. The steep decline came after the dental and animal health company announced its fiscal 2025 first-quarter results before the market opened.
Patterson reported Q1 revenue of $1.54 billion, down 2.2% year over year. The average estimate among analysts surveyed by LSEG was for revenue of $1.59 billion.
The company posted Q1 earnings of $0.15 per share based on generally accepted accounting principles (GAAP). Its adjusted earnings per share were $0.24, well below the consensus estimate of $0.32.
NASDAQ: PDCO
Key Data Points
What's behind Patterson's disappointing numbers?
Patterson Companies' CEO, Don Zurbay, blamed the disappointing fiscal 2025 Q1 results primarily on a "greater than anticipated impact of the Change Healthcare cybersecurity attack." In February 2024, a cyberattack on Change Healthcare, a subsidiary of UnitedHealth Group, crippled its systems. This created a backlog of unpaid claims that caused problems for many healthcare companies.
That wasn't Patterson's only difficulty, though. Zurbay also said that the company's companion animal business experienced lower sales. In particular, sales of consumables fell 3% year over year, and equipment sales declined by 3.8%. Zurbay noted that "the timing of certain corporate expenses" also contributed to Patterson's lower-than-expected results.
Buy Patterson Companies stock on the sell-off?
Despite the disappointing Q1 results, Patterson reaffirmed its full-year earnings guidance. The stock is cheap, with a forward price-to-earnings ratio of only 10.8. Patterson's forward dividend yield tops 4%. I think the big sell-off of Patterson Companies makes the stock an even better pick for value and income investors.
