Dentsply Sirona (XRAY), a provider of dental products and technology, reported a decline in earnings and revenues for the fourth quarter of 2018. However, the results exceeded the consensus analysts’ estimate, driving the stock higher on Friday.
At $1.06 billion, net sales were down 2.9% from the prior-year quarter. The top-line came in slightly above the forecast. A 4.6% revenue growth in Europe and a 1.4% gain in rest of the world were eclipsed by a 14.7% contraction in the US amid hectic destocking by dealers.
Among the product categories, Consumable revenue rose 3.4% annually, helped by the recent recovery in shipments at the company’s European distribution center. Meanwhile, Technology & Equipment revenue fell by 7.4%.
Consumable revenue rose 3.4% annually, helped by the recent recovery in shipments at the European distribution center
Adjusted earnings dropped to $0.58 per share during the three-month period from $0.82 per share in the fourth quarter of 2017. Reported profit was $1.8 million or $0.01 per share, compared to a loss of $650.4 million or $2.85 share in the year-ago quarter.
“We have completed a top to bottom diagnostic of the Company and are executing a major restructuring plan to accelerate growth, improve margins and simplify our business,” said CEO Don Casey.
For fiscal 2019, the management expects adjusted earnings in the range of $2.25 per share to $2.40 per share, which represents a 12-19% annual growth. The forecast for full-year reported revenue is $3.95-$4.05 billion. The top line will be negatively impacted by the ongoing portfolio shaping initiatives and unfavorable exchange rates.
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Internal sales are estimated to grow between 4% and 5% this year, benefitting from new product launches and the absence of dealer destocking. Going forward, the efforts to simplify the organizational structure, such as consolidation of the dental product groups and regional commercial groups, are expected to strengthen performance.
Shares of Dentsply surged about 8% in the pre-market hours Friday following the earnings report, after closing the previous session higher. Since the beginning of 2019, the stock gained more than 10%.
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