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Can R&D Focus Drive DENTSPLY SIRONA's (XRAY) Q2 Earnings?
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DENTSPLY SIRONA’s (XRAY - Free Report) second-quarter 2018 results are scheduled to release on Aug 7, before the market opens. The company’s focus on R&D (Research and Development) and clinical education is expected to boost results.
In the last reported quarter, DENTSPLY posted adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate by 7.1%. However, the metric fell 8.2% year over year. Net sales increased 6.2% year over year to $956.1 million, surpassing the Zacks Consensus Estimate of $944.7 million. However, the figure showed a decline of 1.1% at constant currency (cc).
For the second quarter, the Zacks Consensus Estimate for earnings per share is pegged at 59 cents, reflecting a decline of 9.2% year over year. The same for net sales is projected at $1.03 billion, hinting at an improvement of 3.6% year over year.
Let’s take a look at major factors that will influence DENTSPLY’s performance in the quarter to be reported.
Focus on R&D
DENTSPLY’s overall growth strategy rests on product innovation, which has consistently driven the top line.
Per management, the company spends more than $150 million annually on R&D. For instance, DENTSPLY’s laser team is currently spending a considerable time on innovation. This is likely to drive the company’s share and margin.
This also helps the company maintain a robust pipeline. Management further confirmed that the company expects to launch over 30 major products in 2018, which will significantly boost its domestic and international revenues. In Europe, new products like WaveOne GOLD, X-Smart iQ, VDW and CONNECT Drive are expected to drive revenues.
Other Factors to Consider
Clinical Education
Focus on clinical education is a key differentiator for DENTSPLY.
The Pennsylvania-based dental product manufacturer opened a state-of-the-art training center in Charlotte, NC, in the second quarter. Per management, this move will help the company train over 10,000 dental professionals every year. The company also has a center in Bensheim, Germany, and over a dozen satellite facilities around the world. This facilitates communication with over 25,000 practitioners a year.
Moreover, the company looks forward to starting its new Dental Academy for Investor Day on Sep 27.
Acquisitions
DENTSPLY is upbeat about its recently closed acquisition of OraMetrix.
Per management, it combines a comprehensive software and manufacturing platform that can create improved treatment options for dentists. Furthermore, OraMetrix uniquely integrates digital scanning, 2 and 3D x-rays to create customized individual treatment plans for orthodontic patients.
Guidance Downbeat
Management expects adjusted earnings per share for 2018 in the range of $2.55-$2.65, down from the previous range of $2.70-$2.80. Notably, the Zacks Consensus Estimate for earnings is currently pegged at $2.57, within the guided range.
Revenues are projected to rise 2% at cc. The Zacks Consensus Estimate for revenues is currently pegged at $4.18 billion.
This is likely to offset the company’s results in the quarter to be reported.
What Does our Model Predict?
Our quantitative model shows a beat for DENTSPLY this earnings season.
This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.
Earnings ESP: Earnings ESP for DENTSPLY is +1.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DENTSPLY carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering as they have the right combination of elements to post a beat this earnings season.
Teleflex Incorporated (TFX - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #3.
PerkinElmer, Inc. has an Earnings ESP of +1.03% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Can R&D Focus Drive DENTSPLY SIRONA's (XRAY) Q2 Earnings?
DENTSPLY SIRONA’s (XRAY - Free Report) second-quarter 2018 results are scheduled to release on Aug 7, before the market opens. The company’s focus on R&D (Research and Development) and clinical education is expected to boost results.
In the last reported quarter, DENTSPLY posted adjusted earnings per share of 45 cents, beating the Zacks Consensus Estimate by 7.1%. However, the metric fell 8.2% year over year. Net sales increased 6.2% year over year to $956.1 million, surpassing the Zacks Consensus Estimate of $944.7 million. However, the figure showed a decline of 1.1% at constant currency (cc).
For the second quarter, the Zacks Consensus Estimate for earnings per share is pegged at 59 cents, reflecting a decline of 9.2% year over year. The same for net sales is projected at $1.03 billion, hinting at an improvement of 3.6% year over year.
DENTSPLY SIRONA Inc. Price and EPS Surprise
DENTSPLY SIRONA Inc. Price and EPS Surprise | DENTSPLY SIRONA Inc. Quote
Let’s take a look at major factors that will influence DENTSPLY’s performance in the quarter to be reported.
Focus on R&D
DENTSPLY’s overall growth strategy rests on product innovation, which has consistently driven the top line.
Per management, the company spends more than $150 million annually on R&D. For instance, DENTSPLY’s laser team is currently spending a considerable time on innovation. This is likely to drive the company’s share and margin.
This also helps the company maintain a robust pipeline. Management further confirmed that the company expects to launch over 30 major products in 2018, which will significantly boost its domestic and international revenues. In Europe, new products like WaveOne GOLD, X-Smart iQ, VDW and CONNECT Drive are expected to drive revenues.
Other Factors to Consider
Clinical Education
Focus on clinical education is a key differentiator for DENTSPLY.
The Pennsylvania-based dental product manufacturer opened a state-of-the-art training center in Charlotte, NC, in the second quarter. Per management, this move will help the company train over 10,000 dental professionals every year. The company also has a center in Bensheim, Germany, and over a dozen satellite facilities around the world. This facilitates communication with over 25,000 practitioners a year.
Moreover, the company looks forward to starting its new Dental Academy for Investor Day on Sep 27.
Acquisitions
DENTSPLY is upbeat about its recently closed acquisition of OraMetrix.
Per management, it combines a comprehensive software and manufacturing platform that can create improved treatment options for dentists. Furthermore, OraMetrix uniquely integrates digital scanning, 2 and 3D x-rays to create customized individual treatment plans for orthodontic patients.
Guidance Downbeat
Management expects adjusted earnings per share for 2018 in the range of $2.55-$2.65, down from the previous range of $2.70-$2.80. Notably, the Zacks Consensus Estimate for earnings is currently pegged at $2.57, within the guided range.
Revenues are projected to rise 2% at cc. The Zacks Consensus Estimate for revenues is currently pegged at $4.18 billion.
This is likely to offset the company’s results in the quarter to be reported.
What Does our Model Predict?
Our quantitative model shows a beat for DENTSPLY this earnings season.
This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates.
Earnings ESP: Earnings ESP for DENTSPLY is +1.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DENTSPLY carries a Zacks Rank #3.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering as they have the right combination of elements to post a beat this earnings season.
Edwards Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Teleflex Incorporated (TFX - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #3.
PerkinElmer, Inc. has an Earnings ESP of +1.03% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>