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What's in Store for DENTSPLY SIRONA (XRAY) in Q2 Earnings?

Zacks Equity Research

DENTSPLY SIRONA Inc. XRAY is scheduled to release second-quarter 2019 results on Aug 2, before the opening bell.

In the last reported quarter, the company delivered a positive earnings surprise of 28.9%. Further, it has an average four-quarter positive surprise of 5.6%.

Let’s take a look at how things are shaping up prior to this announcement.

Which Way are Q2 Estimates Treading?

For the second quarter, the Zacks Consensus Estimate for revenues is pegged at $1.03 billion, indicating a decline of 0.7% from the year-ago quarter. The consensus estimate for the bottom line is pegged at 62 cents, suggesting growth of 3.3% from the year-ago reported figure.

DENTSPLY SIRONA Inc. Price and EPS Surprise


DENTSPLY SIRONA Inc. Price and EPS Surprise
DENTSPLY SIRONA Inc. Price and EPS Surprise

DENTSPLY SIRONA Inc. price-eps-surprise | DENTSPLY SIRONA Inc. Quote

Factors to Influence Q2

DENTSPLY SIRONA’s overall growth strategy focuses on product innovation, and research and development (R&D) focus, which is likely to drive sales in the second quarter. This apart, solid track record of innovation and a dedicated, passionate workforce is likely to contribute to performance.

Moreover, better-than-expected performance across all its products categories, equipment and instruments, digital, implants and health care is likely to drive revenues at Technology & Equipment segment. Additionally, the impact of prior-year dealer inventory stocking is likely to contribute to the probable upside.

The company’s CAD/CAM is a dental imaging platform and a major foundation in global dental markets. We expect product launches together with innovation in this area to drive CAD/CAM sales in the to-be-reported quarter, which in turn will bolster revenues in the United States.

The company is likely to have reported witnessed growth in emerging markets in the to-be-reported quarter fueled by better-than-expected performance across Consumables and Technology & Equipment business lines.  

Execution of cost saving opportunities is likely to bolster bottom-line growth in 2019. Consequently, we can expect a similar trend in the to-be-reported quarter.

For 2019, the company estimates revenues to range between $3.95 billion and $4.05 billion, representing an underlying growth of 4-5% over 2018. 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. Consequently, we expect these to lower revenues in the to-be-reported quarter.

DENTSPLY SIRONA’s significant international presence poses a threat to the company’s to-be-reported quarter. Foreign exchange is estimated to negatively impact 2019 revenues of 2.5% or $100 million, given the current rates for the remainder of the year. Consequently, we expect a similar trend to follow in the second quarter.

What Our Quantitative Model Suggests

Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. This is the case here.

Earnings ESP: DENTSPLY SIRONA has an Earnings ESP of +6.95%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: DENTSPLY SIRONA sports a Zacks Rank #1.

Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks Worth a Look

Here are some other medical stocks worth considering as these too have the right combination of elements to post an earnings beat this quarter.

Henry Schein, Inc. HSIC has an Earnings ESP of +2.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allena Pharmaceuticals, Inc. ALNA has an Earnings ESP of +7.55% and a Zacks Rank #2.

Adamas Pharmaceuticals, Inc. ADMS has an Earnings ESP of +13.1% and a Zacks Rank #3.

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