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DENTSPLY SIRONA (XRAY) Q4 Earnings & Revenues Beat Estimates

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DENTSPLY SIRONA Inc. (XRAY - Free Report) reported fourth-quarter 2020 adjusted earnings per share (EPS) of 87 cents, beating the Zacks Consensus Estimate of 64 cents by 35.9%. The figure grew 19.2% year over year.

For 2020, adjusted EPS came in at $1.79, beating the Zacks Consensus Estimate by 15.5%.The figure, however, fell 26.9% year over year.

Revenues

For the quarter, revenues came in at $1.08 billion, beating the Zacks Consensus Estimate by 8%.The topline, however, fell 2.6% year over year. Sales declined 3.3% on an organic basis.

For 2020, the company reported revenues of $3.34 billion, which fell 17.1% from the year-ago quarter due to the impact of the COVID-19 pandemic. However, the top line beat the Zacks Consensus Estimate by 2.5%. Per management, sales declined 16.7% on an organic basis.

Business Details

Consumables

Consumable revenues grew 1.6% year over year and 1.1% on an organic basis in the fourth quarter to $449 million. Per management, the upside was driven by sales of Restorative and Preventive consumables rebounding in the quarter. However, the upside was partially offset by declines in Lab.

Technologies & Equipment

Technologies & Equipment revenues declined 5.4% year over year to $633 million in the reported quarter. On an organic basis, net sales fell 6.2%. Per management,the fall in organic sales was due to the difficult computer-aided design (CAD)/computer-aided manufacturing (CAM) comparisons in 2019. This was partially offset by growth in clear aligners.

Revenues by Geography

In the United States, revenues fell 8.7% to $359 million. Rest of World revenues declined 2.8% year over year to $275 million. Nonetheless, European revenues grew 3% year on year to $448 million.

Margin Analysis

Gross profit in the reported quarter amounted to $571 million, down 6.4% on a year-over-year basis. Gross margin was 52.8%, down 213 basis points (bps).

Adjusted operating profit came in at $150 million, flat with year-ago figure. Adjusted operating margin was 13.9%, up 36 bps.

 

DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise

DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise

 

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

Financial Condition

DENTSPLY SIRONA exited the fourth quarter with cash and cash equivalents of $438 million, up from $405 million in the year-ago period.

Cumulative net cash provided by operating activities was $635 million compared with $633 million in the year-ago period.

2021 Guidance

The company projects 2021 revenues within the range of $4-$4.3 billion. This reflects growth of 20-30% on a reported basis and 15-25% on an organic basis. The Zacks Consensus Estimate for the same is pegged at $3.87 billion.

The company expects adjusted EPS of $2.60 to $2.80. The Zacks Consensus Estimate for the same is pegged at $2.38.

Our Take

DENTSPLY SIRONA ended the fourth quarter on a strong note. The company saw consumable revenue growth in the quarter. The strategic acquisition of Byte, a rapidly growing direct-to-consumer, doctor-directed clear aligner company, is a major positive. The launch of the Axeos imaging system instills optimism.The company is hopeful about witnessing sustained improvement in sales trends, with dental offices reopening and patient visits rising. Per management, in order to position the company better, DENTSPLY SIRONA is undertaking a range of restructuring actions, which will boost revenue growth, expand margins and streamline the organizational structure. These actions instill optimism in the stock amid this uncertain period.

However, the global response to the COVID-19 pandemic negatively impacted the company’s fourth-quarter performance significantly. A substantial decline in the company’s top line is concerning. The company witnessed a weak performance in its Technologies & Equipment segment in the quarter. Significant contraction in gross margin is concerning as well.

Zacks Rank and Other Key Picks

The company carries a Zacks Rank of 2 (Buy). Some other similar-ranked stocks in the broader medical space that already announced quarterly results are Hologic, Inc. (HOLX - Free Report) , Abbott Laboratories (ABT - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) . You can see the complete list of today’s Zacks #1Rank (Strong Buy) stocks here.

Hologic reported first-quarter fiscal 2021 adjusted EPS of $2.86, which surpassed the Zacks Consensus Estimate by 33.6%.

Abbott reported fourth-quarter 2020 adjusted EPS of $1.45, which surpassed the Zacks Consensus Estimate by 6.6%. Further, fourth-quarter worldwide sales of $10.7 billion outpaced the consensus mark by 7.9%.

AngioDynamics reported second-quarter fiscal 2021 adjusted EPS of a penny. The Zacks Consensus Estimate was pegged at a loss per share of two cents. Additionally, revenues of $72.8 million beat the consensus mark by 8%.

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