DENTSPLY SIRONA Inc. XRAY reported adjusted earnings per share (EPS) of 66 cents in the second quarter of 2019, beating the Zacks Consensus Estimate of 62 cents. The bottom line rose 10% from the prior-year quarter.
The Zacks Rank #2 (Buy) company’s revenues declined 3.1% year over year to $1.01 billion and lagged the Zacks Consensus Estimate of $1.03 billion. Per management, internal sales growth was 3%.
Net sales Excluding Precious Metal Content
Net sales, excluding precious metal content, came in at $1 billion, down 3.1% 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 0.9% year over year in the second quarter. Revenues in the segment totaled $558.4 million.
DENTSPLY’s Consumable revenues declined 7.8% year over year to $451 million in the reported quarter.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
DENTSPLY SIRONA Inc. price-consensus-eps-surprise-chart | DENTSPLY SIRONA Inc. Quote
Revenues by Geography
In the United States, revenues fell 2.6% and 1.5% on an internal basis. Rest of World revenues declined 6.9% on a reported basis but grew 2.4% on an internal sales growth basis. European revenues declined 1.1% with foreign exchange accounting for 6.9% of the European revenue decline. However, on an internal sales growth basis, European revenues increased 7.1%.
Gross profit in the reported quarter amounted to $540.8 million, down 2.2% on a year-over-year basis. Gross margin was 53.6%, up 60 basis points (bps).
Excluding precious metal content, gross margin came in at 54.1%, which also expanded 60 bps.
Operating income totaled $67.5 million, improving significantly from an operating loss in the year-ago quarter. Operating margin in the quarter was 0.7%.
DENTSPLY exited the second quarter with cash and cash equivalents of $250.1 million.
For 2019, DENTSPLY continues to expect revenues within $3.95-$4.05 billion. This represents internal sales growth of 4% and 5%. The Zacks Consensus Estimate is pegged at $4.01 billion, near the high end of the guided range.
However, portfolio shaping initiatives and continued acquisitions are expected to reduce 2019 revenues by $60 million.
The company also raised the 2019 guidance range for adjusted EPS to $2.35-$2.45 from the previous range of $2.30 to $2.40. The Zacks Consensus Estimate is pinned at $2.35, at the low end of the company’s projected range.
Adjusted operating margin is expected between 18% and 19%, up from the previously communicated range of 17-18%.
The company expects operating expenses below 2018 levels.
DENTSPLY ended the second quarter on a tepid note. The company gained from its core Technology & Equipment unit which witnessed a year-over-year upside in the quarter. Overall sales grew on an internal basis. Revenues in Europe surged on an internal basis. A raised guidance for EPS and operating margin for 2019 is indicative of bright prospects. Expansion in margins is an added positive.
Meanwhile, DENTSPLY’s Consumable revenues witnessed a year-over-year downside in the quarter. In fact, the company’s quarterly revenues declined in the quarter under review. U.S. and International revenues also deteriorated on a year-over-year basis. Additionally, unfavorable foreign currency exchange and restructuring costs are expected to mar DENTSPLY’s top line.
Earnings of Other MedTech Majors at a Glance
Other top-ranked companies, which posted solid results this earnings season, are Stryker Corporation SYK, Baxter International Inc. BAX and Intuitive Surgical, Inc. ISRG.
Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Its revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Its revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company currently has a Zacks Rank #2.
Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Its revenues of $1.1 billion surpassed the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1 at present.
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