DENTSPLY 4Q EPS Misses, Sales Top - Analyst Blog

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Leading dental products maker DENTSPLY International 's ( XRAY ) fourth-quarter fiscal 2011 adjusted (excluding one-time items including acquisitions/restructuring charges, amortization of intangibles and tax related adjustments) earnings per share of 51 cents missed the Zacks Consensus Estimate by a penny and was just shy of the year-ago adjusted earnings of 52 cents.

Profit (attributable to the company), as reported, slid 40% year over year to $40.6 million (or 28 cents a share) in the quarter. The bottom line was dragged down by acquisition/restructuring charges, supply chain disruption (for orthodontic products) resulting from the Japan quake and unfavorable currency impact, masking a healthy double-digit growth in the top line.

For the full year, adjusted earnings of $2.03 matched the Zacks Consensus Estimate and transcended the year-ago earnings of $1.94. Profit (attributable to the company) dipped roughly 8% year over year to $244.5 million (or $1.70 a share).

Revenues

Net sales for the quarter zoomed 29.9% year over year to $738 million (a quarterly record), well above the Zacks Consensus Estimate of $711 million. Excluding the precious metal content, net sales cruised 30% to $677.8 million, boosted by acquisitions and strong organic growth.

For the fiscal, sales soared 14.3% year over year to $2,537 million, beating the Zacks Consensus Estimate of $2,511 million. Excluding the precious metal content, revenues jumped 14.8% to $2,333 million.

Margins

Gross margin fell to 48.9% from 50.6% a year ago as higher cost of sales (up 34% year over year) more than offset solid revenue growth. Operating margin dipped to 8.9% from 16.8% a year ago, hurt by hefty charges.

Balance Sheet

DENTSPLY ended the fiscal with cash and cash equivalents of roughly $77.1 million, down 86% year over year. Long-term debt increased nearly two and a half fold year over year to $1.49 billion. The changes in cash and debt positions appear to reflect the acquisition of AstraZeneca 's ( AZN ) dental implant unit Astra Tech.

Guidance

Looking ahead, DENTSPLY envisions adjusted earnings per share between $2.22 and $2.30 for fiscal 2012. The corresponding Zacks Consensus Estimate is $2.29. The Pennsylvania-based company expects sustained improvement in many of its key markets in 2012.

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 an Outperform recommendation on the stock.


 
ASTRAZENECA PLC ( AZN ): Free Stock Analysis Report
 
DENTSPLY INTL ( XRAY ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AZN , XRAY

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