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Mixed 1Q for DENTSPLY, Profits Dip - Analyst Blog
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XRAY
DENTSPLY International Inc.(XRAY), a dental and healthcare products company, reported its adjusted earnings per share of 52 cents for the first quarter 2012, in line with the Zacks Consensus Estimate and 2 cents higher than the earnings in the year-ago comparable period. In the quarter, reported profit dropped 22.9% to $53.3 million (or 37 cents a share).
Revenue
Revenues rose 25.6% year over year to $716.4 million (a quarterly record), trailing the Zacks Consensus Estimate of $719 million. Excluding precious metal content, net sales soared 26.3% (up 28.3% in constant currency) to $665.6 million. Growth was led by takeovers and strong internal sales, especially in the U.S.
Margins
Gross margin in the reported quarter increased to 54.8% from 52.6% a year ago. Selling, general and administrative expenses (as a percentage of sales) were higher at 42.5% versus 35.2% of the prior-year quarter. Operating margin fell to 12.2% from 17.3% a year ago.
Balance Sheet
DENTSPLY finished the quarter with cash and cash equivalents of $67.3 million, a decline of 88.3% year over year. Long-tem debt increased more than two fold to $1,481 million.
Guidance
Based on an improving U.S. economy and healthy product mix, the company expects to generate adjusted earnings per share in the band of $2.22 and $2.30 for fiscal 2012. However, the company is wary about the sluggish European economy and the soft orthodontics business.
DENTSPLY is poised to grow its share in the dental implant market, driven by a strong product base and significant investment on product/technology innovation and sales/marketing infrastructure. The acquisition of Astra Tech has reinforced the company's leadership in the global dental market and broadened its product range.
The company's diverse product range, significant international presence, new product introductions and acquisition initiatives are expected to boost operating metrics moving forward.We currently have a Neutral recommendation on DENTSPLY. The stock currently retains a Zacks #2 Rank, which translates into a short-term "Buy" recommendation.
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Revenue
Revenues rose 25.6% year over year to $716.4 million (a quarterly record), trailing the Zacks Consensus Estimate of $719 million. Excluding precious metal content, net sales soared 26.3% (up 28.3% in constant currency) to $665.6 million. Growth was led by takeovers and strong internal sales, especially in the U.S.
Margins
Gross margin in the reported quarter increased to 54.8% from 52.6% a year ago. Selling, general and administrative expenses (as a percentage of sales) were higher at 42.5% versus 35.2% of the prior-year quarter. Operating margin fell to 12.2% from 17.3% a year ago.
DENTSPLY finished the quarter with cash and cash equivalents of $67.3 million, a decline of 88.3% year over year. Long-tem debt increased more than two fold to $1,481 million.
Guidance
Based on an improving U.S. economy and healthy product mix, the company expects to generate adjusted earnings per share in the band of $2.22 and $2.30 for fiscal 2012. However, the company is wary about the sluggish European economy and the soft orthodontics business.
DENTSPLY is poised to grow its share in the dental implant market, driven by a strong product base and significant investment on product/technology innovation and sales/marketing infrastructure. The acquisition of Astra Tech has reinforced the company's leadership in the global dental market and broadened its product range.
The company's diverse product range, significant international presence, new product introductions and acquisition initiatives are expected to boost operating metrics moving forward.We currently have a Neutral recommendation on DENTSPLY. The stock currently retains a Zacks #2 Rank, which translates into a short-term "Buy" recommendation.
DENTSPLY INTL (XRAY): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
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