DENTSPLY SIRONA Inc. (XRAY Quick QuoteXRAY - Free Report) reported fourth-quarter 2021 adjusted earnings per share (EPS) of 76 cents, missing the Zacks Consensus Estimate of 79 cents by 3.8%. The bottom line declined 12.6% on a year-over-year basis.

GAAP EPS in the quarter was 47 cents, up 4.4% from the year-ago quarter.

For the full-year 2021, the company reported an adjusted EPS of $2.87, up 60.3% from the previous year. The figure lagged the consensus mark by 0.7%.

Revenues

Revenues in the quarter under review amounted to $1.09 billion, missing the Zacks Consensus Estimate by 3.6%. The top line increased 0.6% year over year. Sales grew 1.8% on an organic basis.

In 2021, the company reported $4.23 billion, up 27.2% from the previous year. On an organic basis, sales grew 24.6%. The figure, however, missed the consensus mark by 1.4%.

Business Details

Consumables

Consumable revenues fell 8.3% year over year and 4.6% on an organic basis in the fourth quarter to $412 million. Per management, the downside was due to a tough comparison in the prior-year quarter on account of the COVID-19 rebound and the timing of purchases ahead of the annual price increase. However, increased pricing partially negated the downside.

Technologies & Equipment

Technologies & Equipment revenues were up 6.8% year over year to $676 million in the reported quarter. On an organic basis, net sales rose 6.5%. Strength in CAD/CAM (computer-aided-design and computer-aided-manufacturing), Implants and Orthodontics contributed to the improvement. However, supply chain constraints partially offset the upside.

Revenues by Geography

In the United States, revenues increased 7.2% to $385 million. Rest of World revenues fell 3.4% year over year to $266 million. European revenues declined 2.4% year over year to $437 million.

Margin Analysis

Gross profit in the reported quarter amounted to $593 million, up 3.9% on a year-over-year basis. Gross margin was 54.5%, expanding 170 basis points (bps).

Selling, general and administrative expenses were $374 million, down 0.8% from the year-ago quarter. Research and development expenses amounted to $59 million, up 34.1% from the prior-year quarter.

Operating profit was $154 million, up 14.1% from the year-ago quarter. Operating margin was 14.2%, expanding 170 bps on a year-over-year basis.

Financial Condition

DENTSPLY SIRONA exited the fourth quarter of 2021 with cash and cash equivalents of $339 million, up from $281 million in the third quarter of 2021.

Cumulative net cash provided by operating activities at the end of the fourth quarter was $657 million compared with $635 million in the year-ago period.

Share Repurchase and Dividend Update

During the quarter, DENTSPLY SIRONA repurchased shares worth $110 million, while it repurchased shares worth $200 million in 2021. The company had $890 million of authorization remaining under the $1 billion share repurchase program at the end of Dec 31, 2021.

With respect to the dividend, DENTSPLY SIRONA’s board of directors approved a double-digit increase in the company’s quarterly dividend rate, from the prior rate of 11 cents per share to 12.5 cents per share.

2022 Guidance

The company projects 2022 revenues within $4.3-$4.4 billion. The Zacks Consensus Estimate for the same is pegged at $4.47 billion. The outlook includes organic sales growth of 4-5%.

The company expects an adjusted EPS of $3.05-$3.25, up 6-13% on a year-over-year basis. The Zacks Consensus Estimate for the same stands at $3.18.

Our Take

DENTSPLY SIRONA ended the fourth quarter on a weak note, wherein both earnings and revenues missed the consensus mark. The company saw revenue growth in the Technologies & Equipment segment in the quarter. It witnessed higher revenues in the domestic market. Expansion in both gross and operating margins is another plus.

Per management, the fourth-quarter performance reflects the resilience of the dental market and its solid global product portfolio. Significant collaborations, the introduction of a medical-grade 3D printing system for dental practices and dividend hike are highlights.

However, the rise in selling, general and administrative expenses remains a concern. Weakness at Consumables segment is discouraging.

Zacks Rank and Key Picks

Currently, DENTSPLY SIRONA has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Henry Schein, Inc. (HSIC Quick QuoteHSIC - Free Report) , Quidel Corporation (QDEL Quick QuoteQDEL - Free Report) and Bio-Rad Laboratories, Inc. (BIO Quick QuoteBIO - Free Report) .

Henry Schein, carrying a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.5%.

Quidel reported fourth-quarter 2021 adjusted EPS of $7.29, which surpassed the Zacks Consensus Estimate by 49.1%. Fourth-quarter revenues of $636.9 million outpaced the Zacks Consensus Estimate by 0.3%. It currently carries a Zacks Rank #1.

Quidel’s earnings yield of 8.4% compares favorably with the industry’s (0.7%). QDEL surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 129.4%.

Bio-Rad reported fourth-quarter 2021 adjusted EPS of $3.21, which surpassed the Zacks Consensus Estimate by 11.9%. Fourth-quarter revenues of $732.8 million outpaced the Zacks Consensus Estimate by 0.5%. It currently has a Zacks Rank #2 (Buy).

Bio-Rad has an earnings yield of 2.3%, which compares favorably with the industry’s negative yield. BIO surpassed earnings estimates in each of the trailing four quarters, the average surprise being 66.9%.