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DENTSPLY SIRONA (XRAY) Q1 Earnings & Revenues Beat Estimates

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DENTSPLY SIRONA Inc. (XRAY - Free Report) reported first-quarter 2021 adjusted earnings per share (EPS) of 72 cents, beating the Zacks Consensus Estimate of 55 cents by 30.9%. The figure also grew 67.4% year over year.

Revenues

For the quarter, revenues came in at $1.03 billion, beating the Zacks Consensus Estimate by 10.5%.The top line also rose 17.5% year over year. Sales further grew 12.1% on an organic basis.

Business Details

Consumables

Consumable revenues grew 21.5% year over year and 21.2% on an organic basis in the first quarter to $430 million. Per management, the upside was driven by sales of all product categories rebounding in the quarter.

Technologies & Equipment

Technologies & Equipment revenues grew 14.8% year over year to $597 million in the reported quarter. On an organic basis, net sales rose 5.8%. Per management,the upside was driven by sales restoration in Equipment & Instruments and Implants units. Decrease in Digital Dentistry revenues was partially offset by growth in clear aligners.

Revenues by Geography

In the United States, revenues rose 15.7% to $347 million. Rest of World revenues grew 30.3% year over year to $262 million. Also, European revenues grew 12.1% year over year to $418 million.

Margin Analysis

Gross profit in the reported quarter amounted to $579 million, up 23.7% on a year-over-year basis. Gross margin was 56.4%, expanding 283 basis points (bps).

Adjusted operating profit came in at $157 million, up 109.3% from the year-ago figure. Adjusted operating margin was 15.3%, up 671 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 first quarter of 2021 with cash and cash equivalents of $318 million, down from $438 million in the fourth quarter of 2020.

Net cash provided by operating activities was $49 million compared with $10 million used in operating activities in the year-ago period.

2021 Guidance

The company now projects 2021 revenues within $4.10-$4.30 billion, up from the previously issued $4-$4.3 billion band. This reflects 23-28% growth on a reported basis and 18-25% upside on an organic basis. The Zacks Consensus Estimate for the same is pegged at $4.12 billion.

The company expects an adjusted EPS of $2.75-$2.90, up from the prior guidance of $2.60-$2.80.  The Zacks Consensus Estimate for the same is pegged at $2.72.

Our Take

DENTSPLY SIRONA ended the first quarter on a strong note. The company saw revenue growth at both Consumables, and Technologies & Equipment segments in the quarter. It saw higher revenues in both domestic and international markets. The strategic acquisition of Byte, a rapidly-growing direct-to-consumer, doctor-directed clear aligner company in the quarter, is a major positive. The launch of the Axeos imaging system buoys optimism on the stock.

Per management, to strengthen the company’s position, DENTSPLY SIRONA is undertaking a slew of restructuring actions, which will boost revenue growth, expand its margins and streamline the organizational structure. Expansion of both gross margin and adjusted operating margin is another plus.

However, sequential decline in cash and cash equivalents in the first quarter is a concern.

Zacks Rank and Other Key Picks

DENTSPLY SIRONA currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader medical space are Boston Scientific Corporation (BSX - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) , each currently carrying a Zacks Rank of 2 .You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific posted adjusted earnings per share (EPS) of 37 cents for the first quarter of 2021, which exceeded the Zacks Consensus Estimate by 23.3%. Revenues of $2.75 billion also exceeded the Zacks Consensus Estimate by 5.3%.

Integer Holdings reported first-quarter 2021 adjusted EPS of 97 cents, which outpaced the Zacks Consensus Estimate by 12.8%. Revenues of $290.5 million also beat the Zacks Consensus Estimate by 2.6%.

HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion too trumped the Zacks Consensus Estimate by 2.2%.

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