Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of dental products distributor Patterson Companies
So what: Patterson, which, along with dental, also serves the veterinary and rehabilitation markets, forecast that its fiscal 2011 third-quarter sales would grow less than 1% from the previous year, while earnings per share would be flat or slightly down.
Now what: Bad news? You betcha. Analysts were looking for the company to report revenue of $859 million and earnings per share of $0.51, while the company's forecast puts revenue at $825 million and earnings per share between $0.46 and $0.47. Patterson also dropped its full-year earnings per share forecast to a midpoint of $1.87, below the $1.95 that analysts had estimated. In light of the announcement, investors may want to adjust down their growth expectations for Patterson, which likely makes the price-to-earnings multiple of 18 on expected 2011 results seem expensive.
Want to keep up to date on Patterson? Add it to your watchlist.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.