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DENTSPLY (XRAY) Up 3.9% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for DENTSPLY SIRONA Inc. (XRAY - Free Report) . Shares have added about 3.9% in that time frame outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

DENTSPLY (XRAY - Free Report) Beats on Earnings in Q3, Misses Revenue

DENTSPLY SIRONA Inc. (XRAY - Free Report) reported adjusted earnings per share (EPS) of $0.66 in the third quarter of 2016, beating the Zacks Consensus Estimate by $0.03. Earnings were flat on a year-over-year basis.

Notably, DENTSPLY repurchased an additional $100 million of shares and paid $18 million in dividends during the third quarter.

Quarter Details

Net sales increased to $954.2 million from $648.9 million in the year-ago period. However, the figure came below the Zacks Consensus Estimate of $960.0 million. Sales (excluding precious metals) of the combined businesses grew 49.2% at constant currency (cc) exchange rates. Net sales, excluding precious metal content, were positively impacted by approximately 40 basis points due to the weakening of the U.S. dollar over the prior-year period.

Sales (excluding precious metals) of the combined businesses grew 49.2% at constant currency (cc) exchange rates.

In the quarter, U.S. sales surged 33.9% to $334.2 million, while net sales in Europe increased 41.3% to $348.3 million. Sales (excluding precious metals) of the combined business fell 3.1% at cc in the U.S., while European sales rose 1.6%.

Net sales in Rest of World increased 92.6% to $256.7 million. Sales (excluding precious metals) in Rest of World of the combined businesses improved 3.8% at cc.

Segment Details

Post completion of the DENTSPLY-SIRONA merger, the business has been organized into two reporting segments: Dental & Healthcare Consumables and Technologies.

Dental & Healthcare Consumables comprises preventive, restorative, instruments, endodontic and laboratory dental products, as well as consumable medical device products. Sales increased 7% to $497.2 million. At cc, sales of the combined entity were flat year over year in the quarter.

Technologies consist of dental implants, CAD/CAM systems, imaging systems, treatment centers and orthodontic products. Net sales increased 168.5% to $442 million. At cc, sales of the combined business climbed 0.9% in the quarter. Internal sales growth of the combined business was 0.2%.

Guidance

For full-year 2016, the company raised the bottom end of its previous EPS guidance range of $2.70 to $2.80 and now anticipates adjusted EPS in the range of $2.75 to $2.80.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed a downward trend in fresh estimates. There have been seven revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 25.3% due to these changes.

DENTSPLY SIRONA Inc. Price and Consensus

 

DENTSPLY SIRONA Inc. Price and Consensus | DENTSPLY SIRONA Inc. Quote

VGM Scores

At this time, DENTSPLY's stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.


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