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DENTSPLY SIRONA (XRAY) Q3 Earnings & Revenues Beat Estimates

DENTSPLY SIRONA Inc. XRAY reported third-quarter 2020 adjusted earnings per share (EPS) of 67 cents, beating the Zacks Consensus Estimate by 139.3%. The figure grew 17.5% year over year.

The company reported revenues of $894.8 million, which fell 7% from the year-ago quarter due to the impact of the COVID-19 pandemic. However, the top line beat the Zacks Consensus Estimate by 5.9%. Per management, sales declined 8.8% on an organic basis.

Business Details

Consumables

Consumable revenues fell 8.6% year over year and 9.3% on an organic basis in the third quarter to $391 million. Per management, the decline in organic sales can be attributed to the Rest of World and Europe, partially offset by improvement in U.S. sales. Sales of all product groups fell year over year, with Laboratory sales being the most affected category.

Technologies & Equipment

Technologies & Equipment revenues declined 5.7% year over year to $504 million in the reported quarter. On an organic basis, net sales fell 8.5%. Per management, Healthcare saw positive organic growth and Equipment & Instruments sales were consistent, offset by a decrease in Digital Dentistry.

Revenues by Geography

In the United States, revenues fell 5.4% to $318.7 million. Rest of World revenues declined 14.6% year over year to $225.3 million. European revenues dropped 2.9% year on year to $350.8 million.

Margin Analysis

Gross profit in the reported quarter amounted to $442 million, down 13.9% on a year-over-year basis. Gross margin was 49.4%, down 399 basis points (bps).

Adjusted operating profit came in at $100 million, down 12.5%. Adjusted operating margin was 11.2%, down 70 bps.

DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise

 

DENTSPLY SIRONA Inc. price-consensus-eps-surprise-chart | DENTSPLY SIRONA Inc. Quote

Financial Condition

DENTSPLY SIRONA exited the third quarter with cash and cash equivalents of $1.27 billion, up from $1.11 billion on a sequential basis.

Cumulative net cash provided by operating activities was $371.5 million compared with $333.5 million in the year-ago period.

2020 Guidance

Due to the continued uncertainty regarding the duration and impact of the COVID-19 pandemic on the company’s business, the company has not issued 2020 guidance.

Our Take

DENTSPLY SIRONA ended the third quarter on a strong note. The launch of the Axeos imaging system is encouraging. The company is optimistic about witnessing sustained improvement in sales trends, with dental offices reopening and patient visits rising. Per management, in order to position the company better, DENTSPLY SIRONA is undertaking a range of restructuring actions, which will boost revenue growth, expand margins and streamline the organizational structure. These actions instill optimism in the stock amid this uncertain period.

However, the global response to the COVID-19 pandemic impacted the company’ third-quarter performance significantly. Substantial decline in the company’s top line is concerning. The company witnessed weak performance in its core segments in the quarter. Significant contraction in both margins is concerning.

Moreover, sales in the United States, Europe and rest of the world declined substantially in the reported quarter.

Zacks Rank and Key Picks

The company carries a Zacks Rank of 3 (Hold). 

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Thermo Fisher Scientific Inc. TMO, Align Technology, Inc. ALGN and AngioDynamics, Inc. ANGO. While Align Technology currently sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion surpassed the consensus mark by 10%.

Align Technology reported third-quarter 2020 adjusted EPS of $2.25, which surpassed the Zacks Consensus Estimate by 281.4%. Revenues of $734.1 million outpaced the consensus mark by 38%.

AngioDynamics reported first-quarter fiscal 2021 adjusted EPS of 2 cents against the Zacks Consensus Estimate of a loss per share of 6 cents. Revenues of $70.2 million beat the consensus mark by 6.9%.

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DENTSPLY SIRONA Inc. (XRAY): Free Stock Analysis Report
 
AngioDynamics, Inc. (ANGO): Free Stock Analysis Report
 
Align Technology, Inc. (ALGN): Free Stock Analysis Report
 
Thermo Fisher Scientific Inc. (TMO): Free Stock Analysis Report
 
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