DENTSPLY SIRONA Inc. XRAY reported fourth-quarter 2023 adjusted earnings per share (EPS) of 44 cents, which beat the Zacks Consensus Estimate of 43 cents by 2.3%. However, the bottom line declined 4% on a year-over-year basis.
On a GAAP basis, the company reported an EPS of 32 cents against a reported loss of 7 cents per share in the year-ago quarter.
Revenues
Revenues in the reported quarter totaled $1.01 billion, which beat the Zacks Consensus Estimate by 4.5%. The top line also rose 2.9% year over year and 1.9% on an organic basis.
Business Details
As a part of its restructuring plan, XRAY changed its reporting structure from Apr 1, 2023. The company reported fourth-quarter results under four new 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 urology catheters business, earlier part of Technologies & Equipment, and other healthcare-related consumable businesses, previously under the Consumables segment.
Connected Technology Solutions
Revenues in this segment totaled $319 million, down 7% year over year and 8.3% on an organic basis.
Orthodontic and Implant Solutions
Sales in this segment amounted to $259 million, up 10.3% year over year. On an organic basis, net sales improved 10.6%.
Essential Dental Solutions
Sales in this segment amounted to $358 million, up 4.5% year over year. On an organic basis, net sales improved 3.4%.
Wellspect Healthcare
Sales in this segment amounted to $76 million, up 21.1% year over year. On an organic basis, net sales improved 16.9%.
Revenues by Geography
In the United States, revenues decreased 1.2% year over year organically to $368 million. Rest of World (ROW) revenues increased 4.3% organically to $247 million on a year-over-year basis. Revenues in Europe improved 5.3% to $397 million, organically, during the same time frame.
DENTSPLY SIRONA Inc. Price, Consensus and EPS Surprise
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 $522 million, up 1% on a year-over-year basis. The gross margin came in at 51.6%, which contracted 100 basis points.
Selling, general and administrative expenses totaled $409 million, up 1.7% from the year-ago quarter's level. Research and development expenses amounted to $43 million, flat year over year.
Operating income totaled $73 million compared with $65 million in the year-ago period.
Financial Condition
DENTSPLY SIRONA exited the fourth quarter of 2023 with cash and cash equivalents of $334 million compared with $309 million at the end of the last reported quarter.
The cumulative net cash provided by operating activities totaled $30 million compared with $1 million in the year-ago period.
2024 Guidance Issued
DENTSPLY SIRONA provided its guidance for 2024 earnings and revenues, based on declining sales performance in the fourth quarter. The company expects sales in the band of $3.96-$4.02 billion. The Zacks Consensus Estimate for the same is pegged at $4 billion.
XRAY expects adjusted EPS in the band of $2.00-$2.10. The Zacks Consensus Estimate for the same is pinned at $2.03.
Our Take
XRAY's fourth-quarter adjusted earnings as well as revenues beat estimates. Recovery of demand in China will be a key driver of the top line going forward. Sales improved during the fourth quarter in the country following a strong couple of quarters, reflecting recovery after a prolonged period of weak demand. Moreover, strong demand for aligners and CAD/CAM in the U.S. market will support top-line growth going forward.
Zacks Rank and Stocks to Consider
Currently, DENTSPLY SIRONA has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cencora, Inc. COR, Elevance Health, Inc. ELV and Cardinal Health, Inc. CAH.
Cencora, carrying a Zacks Rank of 2 (Buy) at present, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Cencora has a long-term estimated growth rate of 8.6%. COR's earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.
Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, which beat the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12%. ELV's earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 3.1%.
Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently sports a Zacks Rank #1.
CAH has a long-term estimated growth rate of 15.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
