DENTSPLY International Inc.
) reported second-quarter 2013 earnings per share of 66 cents
(excluding one-time items), beating the Zacks Consensus Estimate
by a penny and the year-ago earnings by 4 cents.
Reported net income attributable to DENTSPLY jumped 34.5% year
over year to $87.2 million (or 60 cents a share) from $80.8
million (or 56 cents a share) in the year-ago quarter.
Revenues were roughly flat year over year at $761.0 million,
missing the Zacks Consensus Estimate of $786 million. However,
excluding precious metal content, revenues grew 2.5% (up 2.7% at
constant exchange rate) to $716.0 million, driven by solid
internal sales in the U.S. and decent growth across all other
On a positive note, gross margin in the reported quarter
increased 110 basis points (bps) to 54.5%. However, gross margin,
excluding precious metal content, was down 30 bps to 58.0% versus
58.3% a year ago. Selling, general and administrative expenses
declined 2.1% to $289.9 million in the quarter.
Operating margin surged 180 bps to 16.1% on the back of lower
expenses from 14.3% a year ago. Adjusted operating margin,
excluding precious metal content, expanded 60 bps to 17.2% in the
Balance Sheet and Cash Flow
DENTSPLY ended the second quarter with cash and cash equivalents
of $57.0 million compared with $80.1 million at the end of 2012.
Long-term debt decreased to $1,123.8 million as of Jun 30, 2013
from $1,222.0 million at the end of 2012.
Cash flow from operations was $131.9 million in the first six
months of 2013, up 27.6% from the year-ago level of $103.4
million. Capital expenditure for the same period went up 7.4% to
Based on the current global dental market trends (particularly
Europe) along with the impact of currency rates, DENTSPLY lowered
its 2013 adjusted-earnings per share expectation to the band of
$2.33 to $2.38 from the earlier guidance of $2.33 to $2.43. The
Zacks Consensus Estimate for 2013 earnings of $2.37 lies toward
the top end of the guided range.
Although the bottom line beat estimates, we remain unimpressed by
DENTSPLY's flat top line and lower 2013 guidance in the second
quarter. This is mainly due to ongoing difficult dental market
trends in Europe. However, we note that the company
performed well in the U.S. Moreover, improving margins represent
a potential upside for XRAY.
DENTSPLY currently has a Zacks Rank #4 (Sell). Medical stocks
that warrant a look are
The Cooper Companies Inc.
). Align has a Zacks Rank #1 (Strong Buy), while the other two
have a Zacks Rank #2 (Buy).
ALIGN TECH INC (ALGN): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
HENRY SCHEIN IN (HSIC): Free Stock Analysis
DENTSPLY INTL (XRAY): Free Stock Analysis
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