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What's in Store for DENTSPLY SIRONA (XRAY) in Q3 Earnings?
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DENTSPLY SIRONA Inc.’s (XRAY - Free Report) third-quarter results are likely to reflect the unfavorable impact of foreign exchange, partially offset by solid regional performance in Europe and continued demand for its strategic businesses.
The company has reported only preliminary results for the last two quarters due to an ongoing internal investigation. Earlier this month, the company announced that it has completed the investigation and plans to release third-quarter 2022 results around Nov 9.
Per the preliminary second-quarter results, the company estimated its adjusted earnings per share (EPS) to be at or above 60 cents. The Zacks Consensus Estimate for the same was pegged at 54 cents. The company has a four-quarter average earnings surprise of 1.61%.
Q3 Estimates
For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $992.77 million, indicating a decline of 7.1% from the year-ago quarter. The consensus mark for earnings stands at 59 cents per share, suggesting a decline of 13.2% from the prior-year quarter.
Factors to Note
DENTSPLY SIRONA’s Technologies & Equipment segment witnessed growth in the second quarter of 2022. Strength in CAD/CAM, Implants and Orthodontics contributed to the improvement. This momentum is likely to have continued in the third quarter as well.
Organic sales were strong on the back of regional performance in Europe, continued demand for CAD/CAM, Equipment & Instruments, and Restorative and Preventive Consumables during the second quarter. Moreover, product launches and pricing adjustments during the quarter aided sales. The trend is likely to have continued in the third quarter and boosted sales.
However, the company continued to experience supply shortages and softness in sales in China due to COVID-related shutdowns. Moreover, unfavorable currency movement is expected to have affected sales growth during the soon-to-be-reported quarter.
Gross margin and adjusted EPS are likely to have been adversely impacted by certain expenses that favored second-quarter 2022 margins due to their time of recognition.
Per third-quarter preliminary results, announced earlier this month, DENTSPLY SIRONA’s net sales will be approximately $947 million, reflecting foreign exchange headwinds, global supply chain challenges and softer volumes in the United States and China.
Following the completion of the internal investigation, the company expects to record a pre-tax non-cash charge for the impairment of goodwill and intangible assets in the range of $1.0 billion and $1.3 billion in the first nine months of 2022, reflecting the ongoing macroeconomic headwinds. The company stated that it expects a decline in forecast revenues, lower operating margins, and reduced expectations for future cash flows. Investors are likely to ask for details on these factors on the third-quarter earnings call.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (54 cents per share) and the Zacks Consensus Estimate (59 cents per share), is -8.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DENTSPLY SIRONA currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
EDAP TMS (EDAP - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank of 2. EDAP has an estimated revenue growth rate of 14.2% for 2023.
Masimo (MASI - Free Report) has an Earnings ESP of +4.35% and is a Zacks #3 Rank stock at present. MASI has an estimated earnings growth rate of 13.2% for fiscal 2023.
Masimo’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 6.96%.
Sight Sciences (SGHT - Free Report) has an Earnings ESP of +1.29% and currently carries a Zacks Rank #3. SGHT has an estimated long-term growth rate of 24.3%.
Sight Sciences’earnings surpassed estimates in one of the trailing four quarters and lagged the same in three, the negative average being 7.71%.
Image: Bigstock
What's in Store for DENTSPLY SIRONA (XRAY) in Q3 Earnings?
DENTSPLY SIRONA Inc.’s (XRAY - Free Report) third-quarter results are likely to reflect the unfavorable impact of foreign exchange, partially offset by solid regional performance in Europe and continued demand for its strategic businesses.
The company has reported only preliminary results for the last two quarters due to an ongoing internal investigation. Earlier this month, the company announced that it has completed the investigation and plans to release third-quarter 2022 results around Nov 9.
Per the preliminary second-quarter results, the company estimated its adjusted earnings per share (EPS) to be at or above 60 cents. The Zacks Consensus Estimate for the same was pegged at 54 cents. The company has a four-quarter average earnings surprise of 1.61%.
Q3 Estimates
For the third quarter, the Zacks Consensus Estimate for revenues is pegged at $992.77 million, indicating a decline of 7.1% from the year-ago quarter. The consensus mark for earnings stands at 59 cents per share, suggesting a decline of 13.2% from the prior-year quarter.
Factors to Note
DENTSPLY SIRONA’s Technologies & Equipment segment witnessed growth in the second quarter of 2022. Strength in CAD/CAM, Implants and Orthodontics contributed to the improvement. This momentum is likely to have continued in the third quarter as well.
Organic sales were strong on the back of regional performance in Europe, continued demand for CAD/CAM, Equipment & Instruments, and Restorative and Preventive Consumables during the second quarter. Moreover, product launches and pricing adjustments during the quarter aided sales. The trend is likely to have continued in the third quarter and boosted sales.
However, the company continued to experience supply shortages and softness in sales in China due to COVID-related shutdowns. Moreover, unfavorable currency movement is expected to have affected sales growth during the soon-to-be-reported quarter.
Gross margin and adjusted EPS are likely to have been adversely impacted by certain expenses that favored second-quarter 2022 margins due to their time of recognition.
DENTSPLY SIRONA Inc. Price and Consensus
DENTSPLY SIRONA Inc. price-consensus-chart | DENTSPLY SIRONA Inc. Quote
Per third-quarter preliminary results, announced earlier this month, DENTSPLY SIRONA’s net sales will be approximately $947 million, reflecting foreign exchange headwinds, global supply chain challenges and softer volumes in the United States and China.
Following the completion of the internal investigation, the company expects to record a pre-tax non-cash charge for the impairment of goodwill and intangible assets in the range of $1.0 billion and $1.3 billion in the first nine months of 2022, reflecting the ongoing macroeconomic headwinds. The company stated that it expects a decline in forecast revenues, lower operating margins, and reduced expectations for future cash flows. Investors are likely to ask for details on these factors on the third-quarter earnings call.
What Our Quantitative Model Suggests
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here as you will see.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (54 cents per share) and the Zacks Consensus Estimate (59 cents per share), is -8.60%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DENTSPLY SIRONA currently carries a Zacks Rank #4 (Sell).
Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.
EDAP TMS (EDAP - Free Report) has an Earnings ESP of +14.29% and a Zacks Rank of 2. EDAP has an estimated revenue growth rate of 14.2% for 2023.
EDAP’saverage earnings surprise in the trailing four quarters was 250.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo (MASI - Free Report) has an Earnings ESP of +4.35% and is a Zacks #3 Rank stock at present. MASI has an estimated earnings growth rate of 13.2% for fiscal 2023.
Masimo’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 6.96%.
Sight Sciences (SGHT - Free Report) has an Earnings ESP of +1.29% and currently carries a Zacks Rank #3. SGHT has an estimated long-term growth rate of 24.3%.
Sight Sciences’earnings surpassed estimates in one of the trailing four quarters and lagged the same in three, the negative average being 7.71%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.