May 22, 2008 / 12:20 PM / 11 years ago

UPDATE 2-Patterson Q4 profit in line, sales disappoint; shrs hit

(Adds conference call comments, updates share movement)

May 22 (Reuters) - Medical equipment maker Patterson Cos Inc (PDCO.O) posted a fourth-quarter profit in-line with Wall Street estimates, but its shares dipped 5 percent on disappointing sales and a bleak first-quarter profit outlook.

The company, which gets the bulk of its sales from dental devices and the rest from veterinary and rehabilitation supplies, said fourth-quarter sales were hit by weak digital x-ray sales in its dental unit.

“While it’s true that digital x-ray sales benefitted from a special promotion in last year’s fourth quarter and from a more limited promotion in this year’s third quarter, we’re nonetheless disappointed by this quarter’s performance,” board chairman Peter Frechette said in a conference call.

Patterson will announce changes in its digital radiography promotional programs over the coming weeks, Frechette added.

Frechette was filling in for Patterson’s Chief Executive James Wiltz, who is recuperating from surgery.

Patterson shares, which fell $1.87 to a low of $32.52, recovered slightly and were down $1.36 at $33.03 in morning trade on Nasdaq.

The company competes with Dentsply International Inc (XRAY.O), Henry Schein Inc (HSIC.O) and others in the dental equipment space.

For the fourth quarter ended April 26, Patterson’s net income rose 5 percent to $63.2 million, or 51 cents a share. Last year, it earned $59.9 million, or 44 cents a share.

Sales rose 5 percent to $778.4 million, but missed analysts’ average estimate of $803.2 million.

The company forecast a profit of 38 cents to 40 cents a share for the first quarter ending July 26. Analysts were expecting a profit of 40 cents a share, before special items, according to Reuters Estimates.

For fiscal 2009, the St. Paul, Minnesota-based company expects to earn $1.94 to $1.98 a share. Analysts’ average estimate was for earnings of $1.94 a share, before special items.

The company also said CEO Wiltz will be on a limited schedule for the next four to six weeks, and Frechette, a former CEO of the company, will assist with Wiltz’s duties till he recovers. (Reporting by Varsha Tickoo in Bangalore; Editing by Himani Sarkar)

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