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Dentsply (XRAY) Down 17.8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Dentsply International (XRAY - Free Report) . Shares have lost about 17.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dentsply due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
DENTSPLY SIRONA Q4 Earnings Lag Estimates, Sales Rise
DENTSPLY reported adjusted EPS of 73 cents in the fourth quarter of 2019, missing the Zacks Consensus Estimate by a penny. The bottom line surged 25.9% from the prior-year quarter’s figure.
The company’s revenues rose 4.9% year over year to $1.11 billion and outpaced the consensus estimate of $1.09 billion. Per management, internal sales growth was 8.4%.
Business Details
Net sales Excluding Precious Metal Content
Net sales, excluding precious metal content, came in at $1.10 billion. The figure increased 4.9% on a year-over-year basis.
For investors’ notice, DENTSPLY SIRONA’s precious-metal dental alloy products — used by third parties to construct crown and bridge materials — are subject to price fluctuations.
Technologies & Equipment
Per management, Technologies & Equipment revenues rose 12.4% year over year in the fourth quarter to $669.5 million. Per management, growth was fueled by Digital Dentistry’s strong Primescan sales. Equipment & Instruments sales also saw strong growth in the quarter.
Consumables
DENTSPLY SIRONA Consumable revenues declined 4.7% year over year to $442 million in the reported quarter. On an internal basis, sales fell 3.1%. Per management, disruptions at the company’s Venlo distribution center impacted segment sales. Notably, Endodontics and Laboratory net sales declined, while sales of Preventive products improved.
Revenues by Geography
In the United States, revenues climbed 24.6% to $393 million and 27.5% internally. Rest of World revenues increased 1.5% year over year to $283.7 million. Revenues in the geography grew 5.1% on an internal sales growth basis. European revenues declined 6.5% year on year to $434.8 million. On an internal sales growth basis, European revenues declined 2.9%.
Margin Analysis
Adjusted gross profit in the reported quarter amounted to $1.11 billion, up 4.8% on a year-over-year basis. Adjusted gross margin was 58.2%, up 380 basis points (bps).
Adjusted operating income totaled $222.4 million, up 26.4% year over year. Adjusted operating margin rose 340 bps in the quarter to 20.2%.
Financial Condition
DENTSPLY SIRONA exited the fourth quarter with cash and cash equivalents of $404.9 million.
2020 Guidance
For 2020, DENTSPLY SIRONA continues to expect revenues between $4.10 billion and $4.15 billion, suggesting internal sales growth of 3% to 4%.
The company expects adjusted earnings per share (EPS) in the range of $2.55-$2.80.
Adjusted operating margin is expected between 19.5% and 20.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -28.99% due to these changes.
VGM Scores
Currently, Dentsply has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dentsply has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Dentsply (XRAY) Down 17.8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Dentsply International (XRAY - Free Report) . Shares have lost about 17.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dentsply due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
DENTSPLY SIRONA Q4 Earnings Lag Estimates, Sales Rise
DENTSPLY reported adjusted EPS of 73 cents in the fourth quarter of 2019, missing the Zacks Consensus Estimate by a penny. The bottom line surged 25.9% from the prior-year quarter’s figure.
The company’s revenues rose 4.9% year over year to $1.11 billion and outpaced the consensus estimate of $1.09 billion. Per management, internal sales growth was 8.4%.
Business Details
Net sales Excluding Precious Metal Content
Net sales, excluding precious metal content, came in at $1.10 billion. The figure increased 4.9% on a year-over-year basis.
For investors’ notice, DENTSPLY SIRONA’s precious-metal dental alloy products — used by third parties to construct crown and bridge materials — are subject to price fluctuations.
Technologies & Equipment
Per management, Technologies & Equipment revenues rose 12.4% year over year in the fourth quarter to $669.5 million. Per management, growth was fueled by Digital Dentistry’s strong Primescan sales. Equipment & Instruments sales also saw strong growth in the quarter.
Consumables
DENTSPLY SIRONA Consumable revenues declined 4.7% year over year to $442 million in the reported quarter. On an internal basis, sales fell 3.1%. Per management, disruptions at the company’s Venlo distribution center impacted segment sales. Notably, Endodontics and Laboratory net sales declined, while sales of Preventive products improved.
Revenues by Geography
In the United States, revenues climbed 24.6% to $393 million and 27.5% internally. Rest of World revenues increased 1.5% year over year to $283.7 million. Revenues in the geography grew 5.1% on an internal sales growth basis. European revenues declined 6.5% year on year to $434.8 million. On an internal sales growth basis, European revenues declined 2.9%.
Margin Analysis
Adjusted gross profit in the reported quarter amounted to $1.11 billion, up 4.8% on a year-over-year basis. Adjusted gross margin was 58.2%, up 380 basis points (bps).
Adjusted operating income totaled $222.4 million, up 26.4% year over year. Adjusted operating margin rose 340 bps in the quarter to 20.2%.
Financial Condition
DENTSPLY SIRONA exited the fourth quarter with cash and cash equivalents of $404.9 million.
2020 Guidance
For 2020, DENTSPLY SIRONA continues to expect revenues between $4.10 billion and $4.15 billion, suggesting internal sales growth of 3% to 4%.
The company expects adjusted earnings per share (EPS) in the range of $2.55-$2.80.
Adjusted operating margin is expected between 19.5% and 20.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -28.99% due to these changes.
VGM Scores
Currently, Dentsply has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dentsply has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.