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DENTSPLY SIRONA (XRAY) Q1 Earnings & Revenues Top Estimates

Zacks Equity Research

DENTSPLY SIRONA Inc. XRAY reported adjusted earnings per share (EPS) of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. The bottom line also shot up by 8.9 % from the prior-year quarter.

 

The Zacks Rank #2 (Buy) company’s revenues declined 1% year over year to $946.2 million but surpassed the Zacks Consensus Estimate of $917.1 million.

DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise

DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise | DENTSPLY SIRONA Inc. Quote

Business Details

 

Net sales Excluding Precious Metal Content

 

Net sales, excluding precious metal content, came in at $935 million, down 1.1% year over year.

 

For investors’ notice, DENTSPLY’s precious-metal dental alloy products — used by third parties to construct crown and bridge materials — are subject to certain risks of price fluctuations.

 

Technology & Equipment

 

Per management, Technology & Equipment revenues rose 2.1% year over year in the first quarter. Notably, revenues in the segment totaled $520.8 million.

 

Consumables

 

DENTSPLY’s Consumable revenues declined 4.6% year over year to $425.4 million in the reported quarter.

 

Revenues by Geography

 

Revenues from the United States totaled $313.4 million, which increased 7.4% year over year.

 

In Europe, revenues declined 7% on a year-over-year basis to $395.8 million in the first quarter, owing to unfavorable currency movements.

 

Revenues from the Rest of the World (ROW) also dropped 0.8% to $237 million.

 

Margin Analysis

 

Gross profit in the reported quarter amounted to $499.7 million, down 2.8% on a year-over-year basis. Gross margin was 52.8%, down 100 bps.

 

Excluding precious metal content, gross margin came in at 53.4%, which also contracted 100 bps.

 

Operating income totaled $47.3 million, down significantly by 31.1% year over year.

 

Operating margin in the quarter was 5%, down 220 bps from the year-ago period.

 

Excluding precious metal content, adjusted operating margin came in at 5.1%, down 220 bps in the first quarter.

 

Financial Condition

 

DENTSPLY exited the first quarter with cash and cash equivalents of $225.4 million. Operating cash flow amounted to $29.3 million in the quarter under review.

 

Guidance

 

The company narrowed 2019 adjusted EPS view.

 

Notably, adjusted EPS is now expected in the range of $2.30 to $2.40, compared with the previous guidance range of $2.25 to $2.40. The mid-point of $2.35 lies above the Zacks Consensus Estimate of $2.31.

 

On a reported basis, revenues are expected within $3.95 to $4.05 billion. The Zacks Consensus Estimate stands at $4.01 billion, near the upper end of the guided range.

 

However, foreign exchange headwinds are expected to impact the company’s top line by $110 million in 2019. Moreover, portfolio streamlining initiatives that have already been implemented are anticipated to reduce 2019 revenues by approximately $70 million.

 

Conclusion

 

DENTSPLY ended the first quarter on a solid note. The company gained from its core Technology & Equipment unit which witnessed a year-over-year upside in the quarter. Sales in the United States also grew year over year. The company narrowed EPS guidance for 2019.

 

Meanwhile, DENTSPLY’s Consumable revenues witnessed a year-over-year downside in the quarter. In fact, the company’s quarterly revenues also declined in the first quarter. International revenues also decreased on a year-over-year basis. Additionally, unfavourable foreign exchange and restructuring costs are expected to mar DENTSPLY’s top line, going forward.

 

Earnings of MedTech Majors at a Glance

 

Other top-ranked stocks which reported solid results this earning season are Stryker Corporation SYK, Abbott Laboratories ABT and CONMED Corporation CNMD, each carrying a Zacks Rank of 2. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

 

Stryker delivered first-quarter 2019 adjusted EPS of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

 

Abbott reported first-quarter 2019 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 3.3%. First-quarter worldwide sales came in at $7.54 billion, above the Zacks Consensus Estimate of $7.47 billion.

 

CONMED posted first-quarter 2019 adjusted EPS of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the consensus estimate of $213 million.

 

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