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DENTSPLY SIRONA Inc. (XRAY - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 49 cents, which missed the Zacks Consensus Estimate of 50 cents by 2%. The bottom line declined 3.9% on a year-over-year basis.
On a GAAP basis, the company reported an EPS of 9 cents against a loss of 9 cents per share in the year-ago quarter.
Revenues
Revenues in the reported quarter totaled $984 million, which missed the Zacks Consensus Estimate by 1.1%. The top line declined 4.2% year over year and 2.3% on an organic basis.
Business Details
The company reports quarterly results under four segments — Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare.
While the Connected Technology Solutions segment consists of equipment, instruments and CAD/CAM business, the Orthodontic and Implant Solutions segment includes the implant systems and aligner solutions. These businesses were formerly part of the Technologies and Equipment segment.
The Essential Dental Solutions unit includes endodontic, restorative and preventive consumables businesses, which were part of the former Consumables segment. The Wellspect Healthcare segment includes the urology catheters business, a former part of Technologies & Equipment, and other healthcare-related consumable businesses, previously under the Consumables segment.
Connected Technology Solutions
Revenues in this segment totaled $253 million, down 18.2% year over year and 16.2% on an organic basis.
Orthodontic and Implant Solutions
Sales in this segment amounted to $276 million, up 2.6% year over year. On an organic basis, net sales improved 4.6%.
Essential Dental Solutions
Sales in this segment amounted to $375 million, down 0.4% year over year. On an organic basis, net sales improved 1.4%.
Wellspect Healthcare
Sales in this segment amounted to $80 million, up 9.7% year over year. On an organic basis, net sales improved 11.7%.
Revenues by Geography
In the United States, revenues decreased 0.6% year over year organically to $360 million. Rest of World revenues decreased 4.3% organically to $237 million. Revenues in Europe declined 2.6% organically on a year-over-year basis to $387 million.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
Gross profit in the reported quarter was $511 million, down 7.1% on a year-over-year basis. The gross margin came in at 51.9%, contracting 160 basis points year over year.
Selling, general and administrative expenses totaled $399 million, down 4.1% from the year-ago quarter’s level. Research and development expenses amounted to $41 million, down 16.3% year over year.
Operating income totaled $50 million, down 37.5% from the year-ago period’s level.
Financial Condition
DENTSPLY SIRONA exited the second quarter of 2024 with cash and cash equivalents of $279 million compared with $291 million at the end of the last reported quarter.
The cumulative net cash provided by operating activities totaled $233 million compared with $83 million in the year-ago period.
2024 Guidance Revised
DENTSPLY SIRONA lowered its guidance for 2024 earnings and revenues. The company now expects sales to be in the band of $3.86-$3.90 billion, implying a decline of 1% to flat growth organically. Previously, it expected revenues to be in the range of $3.91-$3.97 billion. The Zacks Consensus Estimate for the same is pegged at $3.93 billion.
XRAY now expects adjusted EPS to be in the band of $1.96-$2.02, down from the previous guidance of $2.00-$2.10. The Zacks Consensus Estimate for earnings is pinned at $2.01 per share.
Our Take
XRAY ended the second quarter with dismal results, wherein both earnings and sales missed estimates. Moreover, a lower outlook for revenues and earnings does not bode well. Shares were down 2.9% during pre-market trading. The stock fell 24.8% year to date against the industry’s2.4% growth and the S&P 500’s 14.3% increase.
Image Source: Zacks Investment Research
The decline in revenues was led by lower demand in Connected Technology Solutions segment due to continued macroeconomic and competitive pressures. However, the remaining three segments reflected growth, which partially offset the decline in the Connected Technology Solutions segment. The trend is likely to continue in the second half of 2024.
Meanwhile, the company started the second phase of its transformation plan that will help it drive profitable growth. XRAY is likely to incur $40-$50 million in non-recurring charges during the rest of 2024 and 2025. The plan is anticipated to result in $80-$100 million in annualized cost savings over the next 12-18 months.
Zacks Rank and Stocks to Consider
DENTSPLY SIRONA currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.
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DENTSPLY SIRONA (XRAY) Q2 Earnings Miss, Revenues Decline Y/Y
DENTSPLY SIRONA Inc. (XRAY - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 49 cents, which missed the Zacks Consensus Estimate of 50 cents by 2%. The bottom line declined 3.9% on a year-over-year basis.
On a GAAP basis, the company reported an EPS of 9 cents against a loss of 9 cents per share in the year-ago quarter.
Revenues
Revenues in the reported quarter totaled $984 million, which missed the Zacks Consensus Estimate by 1.1%. The top line declined 4.2% year over year and 2.3% on an organic basis.
Business Details
The company reports quarterly results under four segments — Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare.
While the Connected Technology Solutions segment consists of equipment, instruments and CAD/CAM business, the Orthodontic and Implant Solutions segment includes the implant systems and aligner solutions. These businesses were formerly part of the Technologies and Equipment segment.
The Essential Dental Solutions unit includes endodontic, restorative and preventive consumables businesses, which were part of the former Consumables segment. The Wellspect Healthcare segment includes the urology catheters business, a former part of Technologies & Equipment, and other healthcare-related consumable businesses, previously under the Consumables segment.
Connected Technology Solutions
Revenues in this segment totaled $253 million, down 18.2% year over year and 16.2% on an organic basis.
Orthodontic and Implant Solutions
Sales in this segment amounted to $276 million, up 2.6% year over year. On an organic basis, net sales improved 4.6%.
Essential Dental Solutions
Sales in this segment amounted to $375 million, down 0.4% year over year. On an organic basis, net sales improved 1.4%.
Wellspect Healthcare
Sales in this segment amounted to $80 million, up 9.7% year over year. On an organic basis, net sales improved 11.7%.
Revenues by Geography
In the United States, revenues decreased 0.6% year over year organically to $360 million. Rest of World revenues decreased 4.3% organically to $237 million. Revenues in Europe declined 2.6% organically on a year-over-year basis to $387 million.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
DENTSPLY SIRONA Inc. price-consensus-eps-surprise-chart | DENTSPLY SIRONA Inc. Quote
Margin Analysis
Gross profit in the reported quarter was $511 million, down 7.1% on a year-over-year basis. The gross margin came in at 51.9%, contracting 160 basis points year over year.
Selling, general and administrative expenses totaled $399 million, down 4.1% from the year-ago quarter’s level. Research and development expenses amounted to $41 million, down 16.3% year over year.
Operating income totaled $50 million, down 37.5% from the year-ago period’s level.
Financial Condition
DENTSPLY SIRONA exited the second quarter of 2024 with cash and cash equivalents of $279 million compared with $291 million at the end of the last reported quarter.
The cumulative net cash provided by operating activities totaled $233 million compared with $83 million in the year-ago period.
2024 Guidance Revised
DENTSPLY SIRONA lowered its guidance for 2024 earnings and revenues. The company now expects sales to be in the band of $3.86-$3.90 billion, implying a decline of 1% to flat growth organically. Previously, it expected revenues to be in the range of $3.91-$3.97 billion. The Zacks Consensus Estimate for the same is pegged at $3.93 billion.
XRAY now expects adjusted EPS to be in the band of $1.96-$2.02, down from the previous guidance of $2.00-$2.10. The Zacks Consensus Estimate for earnings is pinned at $2.01 per share.
Our Take
XRAY ended the second quarter with dismal results, wherein both earnings and sales missed estimates. Moreover, a lower outlook for revenues and earnings does not bode well. Shares were down 2.9% during pre-market trading. The stock fell 24.8% year to date against the industry’s2.4% growth and the S&P 500’s 14.3% increase.
Image Source: Zacks Investment Research
The decline in revenues was led by lower demand in Connected Technology Solutions segment due to continued macroeconomic and competitive pressures. However, the remaining three segments reflected growth, which partially offset the decline in the Connected Technology Solutions segment. The trend is likely to continue in the second half of 2024.
Meanwhile, the company started the second phase of its transformation plan that will help it drive profitable growth. XRAY is likely to incur $40-$50 million in non-recurring charges during the rest of 2024 and 2025. The plan is anticipated to result in $80-$100 million in annualized cost savings over the next 12-18 months.
Zacks Rank and Stocks to Consider
DENTSPLY SIRONA currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported second-quarter 2024 adjusted EPS of 62 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $4.12 billion surpassed the Zacks Consensus Estimate by 2.5%. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.18%.
Hologic, carrying a Zacks Rank of 2 at present, has a long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.50%.
Hologic reported second-quarter 2024 adjusted EPS of $1.06, which beat the Zacks Consensus Estimate by 3.9%. Revenues of $1 billion surpassed the Zacks Consensus Estimate by 1.1%.
Universal Health Services reported second-quarter 2024 adjusted EPS of $4.31, which beat the Zacks Consensus Estimate by 27.9%. Revenues of $3.9 billion surpassed the Zacks Consensus Estimate by 1.5%.
Universal Health Services has a long-term growth rate of 18%. UHS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 14.58%.