Dentsply Sirona stock dips on Q3 misses, lowered guidance

Dentsply Sirona logoShares of Dentsply Sirona (Nasdaq: XRAY) took a slight hit today with third-quarter results that came in shy of expectations.

The Charlotte, North Carolina-based dental equipment and supply maker posted a loss of $1.1 billion in the quarter. That comes to $5.01 per share from sales of $947 million for the three months ended September 30, 2022.

Dentsply Sirona reported a significant drop in net profit to the red with sales down 8.9%. It recorded a non-cash expense for “impairment of goodwill and intangible assets” of $1.1 billion. The company attributed this to macroeconomic factors resulting from weak global demand and the high cost of capital.

In addition, the effects of the unfavorable effects of foreign exchange and increased costs of raw materials, supply chain and services were felt. This has contributed to lowering revenue expectations and lowering expectations for future cash flows.

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Adjusted to exclude one-time items, earnings per share came to 41¢. This is 16 degrees below Wall Street expectations. The company also missed sales, with analysts expecting revenue of $1.03 billion.

During the quarter, the company conducted an internal investigation of potential wrongdoing by former executives. However, earlier this month, Dentsply reported that its board of directors’ audit committee found no evidence of willful wrongdoing or fraud on the part of the former CEO or CFO.

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Dentsply “not satisfied” with third-quarter performance

“Our results in the third quarter reflect continued macroeconomic headwinds, including FX impacts, global supply chain challenges, and regional softness in the US and China. Despite the challenges this quarter, Dentsply CEO Simon Campion said, We were encouraged by double-digit growth in Transparent Alignment, strong performance in Europe, and continued strong demand for imaging equipment.” We are not satisfied with our third-quarter results, but this quarter marks an important turning point as we enter the next chapter for our company. We have begun a comprehensive review of our entire business in order to improve execution, build a winning portfolio, and return the company to growth.

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“Dentsply Sirona has great products and solutions, and a healthy pipeline of innovation, and we are committed to charting a path forward that delivers better and more consistent results for our shareholders.”

Dentsply reduced its guidance for the full year. It said it now expects to post adjusted earnings per share between $1.90 and $2.00 for the year. The company’s revenue ranges between $3.85 billion and $3.88 billion.

XRAY shares are down 1.4% to $31.59 per share in early morning trading today. The MassDevice MedTech 100 Index – which includes shares of the world’s largest medical device companies – rose 6.2%.

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